SEC rules out revival of insolvent Uniwide group

The corporate regulator has ruled out reviving the Uniwide Sales Group of Companies, saying its rehabilitation plan was not feasible, and that the company could no longer meet debt obligations. "There are ample grounds to show that [Uniwide is] now insolvent and we are fully persuaded that the petitioners' enterprise can no longer be revived," the Securities and Exchange Commission (SEC) said in a resolution. The SEC said the group, which owns businesses in retail, real estate and franchising of the Uniwide trade name, was now "technically insolvent." It noted that over the past decade, changes in strategies to make the company profitable again have failed, resulting in gargantuan losses. The Uniwide Sales group owns Uniwide Sales, Inc.; Uniwide Holdings, Inc.; Naic Resources and Development Corp.; Uniwide Sales Realty and Resources Corp.; First Paragon Corp.; and Uniwide Sales Warehouse Club, Inc. In 1999, Uniwide applied for corporate rehabilitation with the SEC. At that time, it still had eight warehouse clubs and two department stores with total assets of P19.864 billion and liabilities worth P11.101 billion. Uniwide earlier said its businesses had been affected by a slowdown in sales, weak receivable collections, high interest payments and mounting debt as a result of its aggressive expansion. By the end of 2008, Uniwide was operating only five warehouse clubs and a department store. Its assets were depleted as liabilities ballooned. At the end of September, the group's assets stood at P2.726 billion, while liabilities further increased to P12.292 billion despite a freeze in the payment of debts since 1999. In February 2000, Uniwide submitted an amended rehabilitation plan after a strategic investor named Casino Guichard Perrachon offered to infuse P3.57 billion in fresh capital. The investor later backed out and since then, management had been changing its tack to achieve a turnaround. Three years ago, the SEC denied Uniwide's proposed rehabilitation plan after its was rejected by majority of its creditors, including Allied Banking Corp., LNC SPV-AMC Corp., Land Bank of the Philippines, Philippine National Bank, Eastwest Banking Corp., LG Electronics Philippines, Inc. and Union Empire, Inc. "Based on our findings, we are convinced that the petitioners failed to achieve the goals of their rehabilitation plan and [the] plan is no longer feasible," the SEC said. — GMANews.TV