Benguet discloses default claims by PNB clients

Benguet discloses default claims by PNB clients 

Posted by Manila Standard Today on Wednesday July 15,2009  

BENGUET Corp. yesterday confirmed that it had been declared in default by the Philippine National Bank and its creditors, and that many of them were pressing the country’s oldest mining company to pay up.

Benguet has told the Philippine Stock Exchange that it had received a letter from PNB, the trustee of Benguet’s foreign creditors, claiming more creditors had declared it in default.

It wasn’t clear how much the mining firm owed its creditors or how much its creditors were dunning it for, but Benguet told the Stock Exchange that it knew nothing about the supposed defaults, and so could not comment.

“Pending inquiry with the PNB, the company considers the PNB notice of default dated July 1, 2009 as premature to warrant a disclosure,” Benguet said.

In January, the company said it had suspended exploration in the King King copper gold project in Pantukan, Compostela Valley, as the dispute with its partner Nationwide Development Corp. remained unresolved.

Benguet president Benjamin Philip Romualdez reported a consolidated net loss of P89 million in the first quarter compared with a net loss of P85 million a year ago. Operating revenue fell to P32.4 million from P41.1 million due to lower sales of chromite.

“For the three-month period this year, the company continued to be in a cash tight position,” Romualdez said.

Rogel Zenarosa, senior vice president of PNB’s trust banking group, had written Benguet to say the bank had received a formal notice from three other creditors that the mining firm was in default under the Mortgage Trust Indenture “for failure to pay the amounts due them.”

In February, Tranche 1 (SPV-AMC) Inc. sent a letter to PNB saying Benguet was in default for non-payment of amounts due them.

Since then, three other Benguet creditors had also confirmed that Benguet was in default. These were Investment 2234 Philippine Fund 1 (SPV-AMC) Inc., Banc of America Securities, and Marathon Master Fund.

“In short, after my April 30, 2009 letter which informed the Philippine Stock Exchange that Benguet Corp. was called in default by its creditor and which Benguet Corp. had belatedly admitted, three additional creditors have called them in default as well, and we understand that in a meeting held among creditors on July 1, 2009, three other creditors had also confirmed their agreement to call Benguet Corp in default,” PNB said.

But Benguet told the bourse that it did not know about the meeting that PNB had had with the creditors.

The mining firm also said it had not received any letters of default from Banc of America Securities and Marathon Master Fund.

“Aside from the two creditors: tranche 1 SPV AMC and Investment 2234 Philippine Funds Inc., the company is not aware of other creditors (if any) that has allegedly declared it in default,” it added. Jenniffer B. Austria

Source: http://www.manilastandardtoday.com/?page=news2_july15_2009