Pacific Plans buyer assures planholders it’s business-as-usual
abs-cbnNEWS.com | 01/22/2009 8:29 PM
Buyers of pre-need firm Pacific Plans, Inc (PPI), which is under receivership, said Thursday that the firm’s court-appointed receiver was notified of the sale and the immediate management take over.
In a letter dated January 19, PPI executive vice president Liwayway Gener informed Mamerto Marcelo Jr., the court-appointed receiver, about the sale transaction between the Yuchengco group, the original owner of PPI, and businessman Noel Oñate’s Abundance Providers and Investments Corporation (APIC). The sale was announced to media on Tuesday.
An association of PPI clients who have brought PPI to court over previous efforts of the Yuchengco group to restructure the pre-need firm questioned the sale and said they will block it since they were not consulted about the ownership change.
Gener said part of the new owner’s plans is the establishment of a transition committee and program to ensure that “there will be no disruption in the operations of PPI and in the servicing of its planholders”.
“Effective immediately, PPI will be under new management. The Securities and Exchange Commission (SEC), the planholders, agents and employees of PPI will also be informed of this change,” the letter stated.
Gener assured that there will be no disruption in the operations of PPI and in the servicing of its planholders noting that APIC and GPL had agreed to put in place a transition committee and program to ensure this.
She also stressed to Marcelo that “the sale will have no effect on the existing rehabilitation of PPI. The sale only meant a change in the shareholdings of PPI. There is no diminution in the corporate or trust fund assets of PPI.”
APIC’s entry into the pre-need firm was done via the purchase of the entire stake of GPL Holdings Inc. in PPI for P250 million under a share purchase agreement.
Oñate had earlier paid a courtesy call to Securities and Exchange Commission chairperson Fe Barin to formally inform her of the change in ownership of PPI.
APIC director Rita Linda Jimeno said they are preparing notification letters for PPI planholders, adding that the company is willing to talk with them.
“I hope that they will give us a chance first before they react negatively about the deal,” she said.
“With our fresh perspective and focus, we will work with our plan holders initially to ride out the present economic challenges and then further gain strength and momentum moving forward,” Oñate earlier said.
He noted that the local pre-need industry is resilient and, despite present challenges, it still is a potentially lucrative business given the opportunity to re-engineer its offerings and operations.
Oñate believes that PPI can recover with a good business plan, an improvement of the global financial market over time, good conservative management of the trust fund assets, and a proactive planholder management which invites and encourages dialogue and participation in company initiatives which would redound to the health of both the company and the stakeholders it serves.
Oñate pledged to abide by the rehabilitation plan for PPI. He said it is business as usual for PPI and plan holders will be served by existing PPI branches nationwide.
APIC has to apply for a secondary license with the SEC for it to be allowed to operate as a pre-need firm. “It is a procedure they need to do to be able to sell new plans,” explained commission secretary Gerard Lukban.
PPI is one of the leading pre-need firms in the country. It became problematic in 2002 when it ceased payments of claims after it encountered liquidity problems due to its offering of open-ended plans. Its planholders number to about 200,000.
It later sought the court’s protection and filed for corporate rehabilitation.
Under its approved rehabilitation plan, planholders are given the option to replace their open-ended plans with fixed-value plans, which can be encashed by July 2010, when the government bonds in PPI’s trust funds mature.
as of 01/22/2009 8:30 PM