Gotianun-led EastWest Banking Corp. (EWBC) may not compel Victorias Milling Corp. (VMC) to swap the convertible notes amounting to more than P300 million issued by the sugar miller into equity, the Securities and Exchange Commission (SEC) en banc ruled.
In its disclosure to the Philippine Stock Exchange on Thursday, VMC said the SEC en banc reversed its March 2015 ruling which allowed EastWest Bank to convert the sugar miller’s debt into common shares.
“EastWest Banking Corp.’s motion to compel Victorias Milling Corp. to allow EWBC to exercise its option for the conversion of the unconverted convertible note filed with the special hearing panel is hereby denied,” VMC said in its disclosure, quoting the decision of the SEC.
In its March ruling, the SEC sided with EastWest and directed the sugar firm to convert 13 percent of the outstanding unconverted note held by the bank into common shares.
Previously, the debt saddled sugar firm was able to convert some P1.1 billion of its debt from its unsecured creditors at a ratio of P1 of debt to P1 of common stock.
The said conversion resulted in a change in management control of the parent company effective on October 9, 2002, in which creditors controls 69 percent of the ownership of the parent company, while the existing stockholders prior to the conversion was reduced to 31 percent.
Tycoon Lucio Tan owns about a fifth of VMC, while other groups such as First Pacific group want to increase their respective holdings in the sugar firm, which is still one of the country’s major players.
For its fiscal nine-month period, the company reported a comprehensive income of P1.31 billion from last year’s P947.74 million.
Total revenues for the period, however, was slightly down to P4.15 billion from last year’s P4.26 billion.
The total canes hauled for the period rose by 7 percent to a total of 3,361,887 tons as more canes from farther districts were brought to the sugar central for milling.
Meanwhile, raw sugar recovery declined by 4 percent to 2.09 50-kilogram bags per ton cane milled from 2.19 50-kg bags. “The lower recovery rate is due to the lower quality of canes milled,” it said.