De Ocampo buys time, stops P4-B foreclosure of Zamora’s PhilPhos debt
Philippine Veterans Bank chairman Roberto de Ocampo has turned financial savior of the hobbled fertilizer empire of mining magnate Salvador “Buddy” Zamora II, putting on hold a P3.9-billion foreclosure even if it would weaken the financial ratios of his own bank.
According to the grapevine, three of a four-bank consortium had voted to call in the P3.9 billion notes of Philippine Phosphate Fertilizer Corp., after PhilPhos defaulted twice on interest and principal payments since its Isabel, Leyte plant was battered by Supertyphoon Yolanda in 2013.
The fourth, Veterans Bank, broke ranks and, to the annoyance of the three others, used its veto power to stop Standard Chartered, Cocobank, and China Bank from pursuing foreclosure.
Of the P3.9-billion PhilPhos debt, P1 billion was lent by Veterans Bank.
A Ramos-era finance secretary, De Ocampo cited “national interest” in intervening for PhilPhos, which is owned almost 70 percent by Zamora and 30 percent by the Republic of Nauru.
According to an exchange of communications among the banks, De Ocampo hewed to the debtor’s line that PhilPhos should channel whatever cash it has to fund its rehabilitation, even though 90 percent of the note values are guaranteed by the government’s Philippine Export-Import Credit Agency.
“A call on the guarantee will benefit syndicate members without any clean exposures, e.g. Philippine Veterans Band and China Bank,” PVB executive vice president Jesus Vicente Garcia said. “However, PVB prefers to pursue orderly repayment via debt restructuring/refinancing.”
PhilExim itself is not unprotected since the government agency holds an undetermined share in the P6.5-billion damage claim that PhilPhos would be getting from the reinsurers for its building, machinery and equipment.
According to the grapevine, PhilPhos has already been awarded and received P2.4 billion out of another P2.85-billion claim on its damaged stock of fertilizer and raw materials stored within the 128-hectare complex.
The plant’s machineries, thankfully, are basically intact, with the granulation plant back in working condition.
The row between the banks and PhilPhos has already reached Finance Secretary Cesar Purisima, who, if the banking grapevine is to be believed, confirmed that PhilExim has to honor its guarantee if the Aquino administration does not want to add another statistic to its growing record of failed contractual commitments.
In the meantime, because of De Ocampo’s opposition and subsequent delay on the banks to call on the PhilExim guarantee, PhilPhos filed for financial rehabilitation and was late last month granted by a Leyte court a commencement order to keep the creditors at bay.
The phosphatic fertilizer complex was one of the 11 industrial projects planned by then President Marcos in the late 1970s that would form the backbone of an industrializing Philippines.
Completed in 1984 amid the country’s worst post-war economic crisis, the fertilizer plant was built next to the copper smelter, making use of the smelter’s sulfuric acid byproduct.
PhilPhos only started commercial operations in 1987, a year after Marcos was ousted. It was and still is the most advanced phosphatic fertilizer manufacturing facility in Asia, capable of producing one million metric tons of various fertilizer grades.
About 50 percent of the fertilizer output are exported, mostly to China and Vietnam and, lately, Zambia.
The cash-strapped Estrada administration privatized the government stake in 2000, with current Palawan Governor Jose Alvarez emerging as the winning bidder before he quietly sold out to Zamora, brother of House Minority Leader Ronaldo Zamora.
Another brother, Manuel, is the chairman/founder of the listed Nickel Asia Group.
CMT sues ex-partners for wiretapping
The nasty divorce of Cruz Marcelo Tenefrancia and The Firm has taken a turn for the worse, with CMT suing its former partners, even the junior colleagues, for wiretapping.
CMT filed the case not in Taguig but before the Department of Justice itself, claiming unlawful recordings within the lobby and elevators of their contested CVCLaw Center building.
(Disclosure: CMT is also suing Money-Go-Round for libel, claiming among others that the law firm and its partners are “private persons” that do not deserve the negative publicity that they had been subjected to.)
For those born yesterday, Cruz Marcelo Tenefrancia refers to the Arroyo-era Defense Secretary Avelino Cruz Jr., GMA-era Ombudsman Simeon Marcelo and GMA-era Presidential Legal Counsel Joe Nathan Tenefrancia.
The three CMT principals did not actually file the complaint themselves, but instructed five of their junior partners, to battle against The Firm’s holdover partners, F. Arthur Villaraza, Raoul Angangco and 11 other colleagues, plus an undetermined number of John and Jane Does.
CMT used the video and audio recordings submitted by Villaraza & Angangco in their complaint before the Ombudsman against a number of Taguig policemen and firemen who accompanied the CMT team early this year to force their way into the contested CVCLaw Center.
For good measure, CMT also threw in a perjury complaint against their former colleagues, also before the justice department.
Assistant State Prosecutor Jinky Dedumo has been picked for the difficult task of conducting the preliminary investigation and playing judge and referee among her squabbling legal colleagues.
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