BNP Paribas issues default notice on Benguet Corp.

Another creditor, this time French bank BNP Paribas, has issued a notice of default on listed miner Benguet Corp., which has failed to pay a P1.2-billion loan balance to various lenders. But the country’s oldest mining company insists the default notice was premature, adding that its creditors must collectively issue a formal declaration of default. "BNP Paribas’ notice of default is premature and not effective for not complying with the provisions of the [deal restructuring the loan]," Benguet told the Securities and Exchange Commission and Philippine Stock Exchange on Wednesday. Benguet owes BNP Paribas $1.04 million (about P47 million) in principal debt. A notice of default is a notification given to a borrower stating that he has failed to pay his debt on time, and that the lender may choose to foreclose his property if he fails again to settle the loan in a given time. Benguet borrowed P4.2 billion from various lenders in the late 1980s to finance its mining projects. It claims to have paid P3.3 billion in principal plus interest of about P1 billion. "Due to the peso devaluation, the remaining account is approximately P1.2 billion today," it said on Wednesday. The miner noted that it has a settlement offer to its creditors, adding that there is an ongoing validation process to determine who the creditors of record are. It has received notices of default from various creditors, including trustee Philippine National Bank. The company has offered to pay a fifth or P312 million of its P1.56-billion principal debt in cash, saying a settlement would benefit all parties. — Norman P. Aquino, GMANews.TV