New Pacific Plans owner vows to meet obligations
by RG CRUZ, ABS-CBN News | 01/23/2009 5:41 PM
Pacific Plans’ new owner businessman Noel Oñate sees a rebound of the pre-need industry within the next 12 to 24 months.
Speaking to ABS-CBN News, Oñate justified his take over of the troubled pre-need firm owned by the Yuchengcos by expressing optimism at finding the turnaround of the company to be a challenge.
Oñate says now was the time to buy into the company when it has low value rather than when it has a higher value.
Oñate enumerates two main problems for the pre-need industry: the disparity between the revenues/interest earned by money invested in pre-need plans by consumers, and the increases in tuition.
He cites that while tuition has gone up by 30-40%, purchased educational plans earn only 10%.
That’s why, he says, government should consider putting a cap on tuition increases.
The other problem that the industry has to deal with, says Oñate, is the global financial crisis, which has led to the depreciation of the values of the investments of pre-need companies.
Oñate, however, isn’t so optimistic about the prospects of a bailout plan from government, expressing doubts government has money for the purpose.
He says Pacific Plans Inc. (PPI) has a good intrinsic value and good fundamentals, like assets of P12.5B, operating revenues of P1.8B, a loyal sales force of 10,000, and a good management team.
However, he says that PPI’s problem is with its investments, which lost value because of the global financial crisis.
PPI needs to aggressively market its products, and he says he is willing to devote time and energy and put focus to save the company.
Oñate explains that the company can invest in assets that are sure to earn with the rebound of the market.
In the long term, he expects pre-need companies’ asset values to go up by 20-30%.
Oñate assures PPI planholders that they will not renege on their obligations to planholders, and they will, in fact, meet with planholders Friday next week.
as of 01/24/2009 9:22 AM
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