Rockwell Land Corp., the property arm of the Lopez group, said Friday it reduced the planned 2020 capital expenditures by half to P9 billion because of the coronavirus pandemic.
This year’s programmed spending was also 19-percent lower than P11.1 billion the company spent in 2019.
“Given the 2.5-month lockdown and considering new safety protocols in construction, the company also expects to reduce capex in 2020 by half from P18 billion to around P9 billion,” Rockwell said in a disclosure to the stock exchange.
Rockwell also said it would conduct a consent solicitation exercise for seven-year and one-quarter P5- billion fixed-rate bonds due Feb. 15, 2021.
The consent solicitation seeks to amend the bond trust indenture to remove the debt service coverage ratio covenant under the bonds.
Bondholders that consent to the proposed amendment will have the option to either receive an incentive fee or sell their bonds to Rockwell.
Rockwell said the proposed amendment would align the financial covenants of the bonds with its other existing debt facilities that do not have a DSCR covenant.
Bondholders who will provide their consents would be paid an incentive fee of P1.25 for each P1,000 of the principal amount of the bonds.
Bondholders who will provide their consents and opt to sell their bonds to Rockwell will also receive the sum of the outstanding principal amount of the bonds being sold multiplied by the tender price of 101 percent and accrued interest computed from the last interest payment date up to the bond sale proceeds payment date.
The exercise will commence on June 2, 2020 and will expire on June 24, 2020.
Rockwell appointed First Metro Investment Corp. as advisor for the consent solicitation exercise.
Rockwell booked consolidated net income of P3 billion in 2019, up 20 percent from 2018. Reservation sales grew by 13 percent last year to P16.7 billion.
Reservation sales fell 9 percent in the first quarter this year to P3.2 billion.