First Pacific to tender for outstanding convertibles after loan problems

New York, Jan. 9 - First Pacific Co. Ltd. announced it will tender for all its outstanding convertibles after a property company told First Pacific's Larouge unit it will be unable to repay a $90 million loan.

First Pacific said it was launching the tender "in order to allay any convertible bond repayment concerns that might exist as a result of this development."

The Hong Kong-based company said it will repay the $208 million outstanding principal of convertibles at a cost of $281 million, including interest and the redemption premium. It will fund the payment through $90 million of cash on hand and by drawing down from a previously announced HK$1.56 billion ($200 million) facility.

The tender is subject to approval by the trustee for the convertibles, First Pacific said, adding that it will release further details once discussions with the trustee are finalized.

First Pacific issued $350 million of the five-year convertibles in March 1997 through its First Pacific Capital (1997) Ltd. unit. The securities pay a coupon of 2% and can be converted until March 2002 at a price of HK$12.25 per share. They are redeemable at 134% of face value. So far the company has repurchased approximately 41% of the issue.

The loan problem concerns Philippine property company Metro Pacific Corp., which borrowed $90 million from First Pacific's Larouge unit in April 2001. The loan was due Dec. 31, 2001 and was secured by a pledge of Bonifacio Land Corp. shares owned by Metro Pacific.

First Pacific said Larouge will now co-manage with Metro Pacific the sale of Metro Pacific's 69.6% controlling stake in Bonifacio Land Corp., a joint venture with the Philippine Government to redevelop part of Manila's business district. MPC is also working on a plan to reduce its debt, to be announced no later than the end of February.

End

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.