Vitarich unveils new rehab program
Poultry and feeds producer Vitarich Corp. plans to implement a debt-to-equity program and quasi-reorganization in order to wipe out the company’s P400-million debt and eliminate its deficit.
Vitarich president and chief executive Ricardo Manuel Sarmiento said in a press conference the company filed with the Securities and Exchange Commission its debt-to equity conversion plans, its second in a span of four years to revitalize the company.
“By paying the company’s remaining debt with shares, the company will conserve as much-needed cash for its operations and its expansion plans,” Sarmiento said.
“Also paying the remaining debt with shares instead of doing a dacion of its core assets will allow Vitarich to benefit from the rental income and future increase in real estate value of its non-core assets,” he added.
Vitarich in 2013 converted P2.3 billion worth of debts held by Kormasinc Inc. into equity.
Sarmiento said Vitarich was seeking SEC approval for the quasi-reorganization, which would enable the company to eliminate its deficit totaling P2.417 billion as of end 2016 after the planned debt-to-equity swap.
“After the quasi-reorganization abolishes the company’s deficit, Vitarich can then already declare dividends to its shareholders from unrestricted earnings that will subsequently be generated,” Sarmiento said.
Vitarich plans to secure SEC’s nod on debt-to-equity and quasi-reorganization by 2018.
Vitarich, which exited corporate rehabilitation in 2016, has also been beefing up operations to boost its business.
The company in October inaugurated its P250-million state-of-the-art feed mill in Panacan, Davao City, with a capacity of 100,000 bags per month. It has also expanded its feed mills in Iloilo and dressing plant in Davao.
The company plans to build a 20,000 ton-per-hour animal feed milll facility in Central Luzon next year. The project is expected to cost P400 million.
Vitarich has also embarked on a route-to-market enhancement program that aims to widen the company’s distribution and help it reach more areas in the country.
“We aim for greater availability of our commercial feed lines in all major areas thru partnerships with major distributors nationwide,” Sarmiento said.
The poultry producer filed for corporate rehabilitation in 2006 after it experienced difficulties in paying bank loans and other liabilities, which ballooned to P3.26 billion from an outstanding loan of P2.6 billion.