Manila, Philippines, August 30, 2002
—The International Finance Corporation (IFC), the private sector financing arm of the World Bank Group, and Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO, the Netherlands Development Finance Company) have filed a creditor-initiated rehabilitation plan in respect of Pryce Gases, Incorporated (PGI). The rehabilitation plan, submitted to a Regional Trial Court in Makati City, Philippines, is the first ever initiated by creditors in local courts seeking to preserve a borrower’s business as a going concern.
PGI is engaged in the distribution of liquid petroleum gas (LPG) and industrial gases, primarily in the Visayas and Mindanao regions. As of April 30, 2002, PGI is estimated to have owed its banks and financial creditors a total amount (including principal and unpaid interest) of P2.671 billion, or approximately US$53.5 million, of which about 44 percent was due to IFC and FMO combined. PGI has been in default on its interest payments to IFC and FMO since December 2000 and on its principal payments since December 2001.
IFC and FMO, both developmental finance institutions, are well positioned to play a constructive role in protecting the interests of
all
stakeholders involved: lenders, employees, customers, investors, and suppliers – as well as safeguarding the social, environmental, and economic welfare of the communities affected by PGI’s business operations. IFC and FMO believe that PGI’s LPG operations can be restored to economic viability and that the rehabilitation plan would enable PGI to resume its role as a competitive player in the Philippines’ deregulated fossil fuel markets.
IFC has been active in the Philippines for over 25 years. The Corporation’s financial commitments in the country (including cumulative loans, equity, and quasi-equity through FY ended June 30, 2002) amounted to $1.1 billion for its own account and $696 million in loan syndications. These investments cover 70 projects in sectors as diverse as energy, infrastructure, financial markets, agribusiness, health care, manufacturing, and tourism.
FMO, the Netherlands Development Finance Company, supports the private sector in developing countries in Latin America, Africa, Eastern Europe and Asia with long-term financing and know-how. Its aim is to make a significant contribution to the sustainable development of these countries via the private sector. With a portfolio of nearly EUR 2 billion and a staff of over 200, FMO is one of the world’s largest bilateral development banks. FMO is a sound financial institution with a “Triple A” rating (S&P). It was established in 1970 as a joint initiative by the Dutch government and Dutch trade and industry. Within Asia, the Philippines is one of FMO’s seven focus countries, with a total portfolio of EUR151.3 million as of fiscal year ended December 31, 2001. The majority of these investments are in the telecom, financial and infrastructure sectors.
IFC’s mission is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, and provides technical assistance and advice to governments and businesses. Since its founding in 1956 through FY02, IFC has committed more than $34 billion of its own funds and arranged $21 billion in syndications for 2,825 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY02 was $15.1 billion for its own account and $6.5 billion held for participants in loan syndications.
