Vitarich moves closer to corporate rehab exit
AGRIBUSINESS firm Vitarich Corp. has moved closer to an early exit from a court-assisted rehabilitation program after settling its remaining debt with Korma-sinc, Inc.
Vitarich and Korma-sinc executed a memorandum of agreement for a dacion en pago, or payment in kind, of the former’s non-core assets in Bulacan and Davao at P373.19 million “in furtherance of the pending option for successful exit from corporate rehabilitation,” the listed company said in a disclosure to the stock exchange on Tuesday.
The balance of P39.49 million will be covered by a postdated check.
Korma-sinc assigned all its security interest in the Mortgage Trust Indenture to Vitarich, the listed firm said.
“Vitarich and Korma-sinc have agreed to extinguish all secured debts of Vitarich in accordance with the approved rehabilitation plan,” the listed company said.
In 2014, Vitarich had asked the Regional Trial Court ( RTC) of Bulacan for an early exit from its court- assisted rehabilitation program.
On May 31, 2007, Branch 7 of the RTC of Bulacan approved a 15-year rehabilitation program for the firm, with the Securities and Exchange Commission ( SEC) on Oct. 16, 2013 approving the conversion of the firm’s P2.38 billion in debt to Korma-sinc, Inc. into equity, as well as an increase in authorized capital stock to P3.5 billion from P500 million.
The sale of the plant and a P2.38- billion debt- to- equity conversion allowed Vitarich to significantly reduce its debt, Vitarich Executive Vice-President and Chief Operating Officer Ricardo Manuel M. Sarmiento said in 2014.
Korma-sinc will own 80% of the Philippine firm after the debt conversion, while the Sarmiento family will retain a 5% stake. The remaining shares are publicly held.
Once a leading poultry and feeds producer, Vitarich filed for corporate rehabilitation in 2006 due to difficulty in paying off its debts. The Asian financial crisis and the avian flu outbreak in 2003 weighed heavily on the company’s finances.
Shares in Vitarich slid seven centavos or 5.93% to end at P1.11 each on Tuesday. —