Feed miller Vitarich stages a comeback, to leave rehab by September
July 7, 2014 1:36pm
By DANESSA O. RIVERA, GMA News
Listed Vitarich Corp. is eyeing partners to expand its business after the food supplier and animal feed miller graduates from a corporate rehabilitation program in September, in time for the ASEAN economic integration in 2015.
Vitarich still owes creditors P300 million after a debt-to equity agreement with a creditor and the sale of a factory in Bulacan, COO and executive vice president Ricardo Manuel Sarmiento told reporters in a briefing Monday.
"We will have about P300 million left... We're talking with Kormasinc how we will deal with that," he said.
"We expect to be officially out by September," he added.
In September 2013, the Vitarich board approved a P2.38-billion debt-to-equity deal with creditor Kormasinc Inc. - to be implemented in tandem with an increases the miller's authorized capital stock to P3.5 billion from P500 million - which was green lit by the Securities and Exchange Commission in November 2013.
Kormasinc, majority owned by Pedro Gonzalo Sereno, a family friend of the Sarmientos, partnered with global investment manager ADM Capital and Altus Capital Partners, a Philippine-based distressed debt and special situations investment manager, to help in the Vitarich rehabilitation and turnaround.
Vitarich also sold its non-core factory in Marilao, Bulacan to 8990 Holdings Inc. for P610 million last Friday, Sarmiento said.
Without the Marilao plant, the company will have a capacity of 120,000 bags of animal feed - from its Iloilo and Davao facilities - from 300,000 bags before the sale.
Sarmiento earlier said the company intends to leave a corporate rehabilitation program in the next two years.
Once Vitarich is out rehabilitation, the Sarmiento said it will be easier for the company to expand, pay its debt and find partners.
"There will be a lot of benefits because the stench of rehab will be out," he said.
"After getting out of rehab, especially with AEC next year, we're looking for strategic partners in the region that will give us new technology that will help us operate better," Sarmiento added.
Expanding core businesses
By 2015, the ASEAN Economic Community (AEC) sets in motion the creation of single market and production base for the 10-nation bloc. The AEC will be characterized by the free flow of goods, services, skilled labor, investments and capital.
ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.
"It should work for us because it means more mouths to feed," Sarmiento said.
The company will also concentrate on expanding its core businesses of food and feeds, he added.
By September, Sarmiento said it will launch its latest product Golden Dory.
"It's a locally bred and grown fish using our standards. We're very excited to bring it out as an alternative to Cream Dory," he said.
"We have a few more (product launches) before Christmas season," he added.
With the new products, Sarmiento said Vitarich expects old clients and business partners and banks will again be very interested in the company.
Vitarich opted to enter a corporate rehabilitation program in 2006, as it could no longer repay bank loans and other liabilities of P3.26 billion.
An over-supply of poultry in the market, on top of stiff competition, after quantitative restrictions on importation of poultry and poultry products were enforced, spurred liquidity problems for Vitarich, the company claimed.
The brothers Feliciano, Lorenzo and Pablo Sarmiento, established the company in 1950 to produce and distribute poultry products - live and dressed chicken, day-old chicks, and animal feeds. - VS, GMA News
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