C & P Homes Cuts Debt by P3 B

November 5, 1999 PSE CIRCULAR FOR BROKERS NO. 2822-99 C & P Homes Cuts Debt by P3 B A series of exchange of debt for real estate assets has enabled the revitalizing giant homebuilder C & P Inc. to reduce its total debt stock by P3 billion to date. The exchanges form part of an ongoing debt restructuring program for the company's obligations to both local and foreign creditors, according to Sulficio Tagud, Jr., C & P Homes' Chairman. He expressed confidence, the company would be able to conclude more exchanges soon to further reduce the company's domestic obligations. With regard to C & P's dollar-denominated loans, the foreign creditor have initially accepted the company's proposal for a standstill in the payment of interest on its $150 million floating rate notes (FRN), Tagud added. "At the rate things are going, we'll be out of the woods sooner than we expect," he observed. The monetized assets consist of residual lots of completed developments and non-core portions of C & P's landbank. As most of these assets are strategically located in already developed masterplanned projects, the banks apparently hope to get a better yield than their tied-up exposure to the company. C & P Homes' creditors have been receptive to the company's proposal for the revision of the original terms of its credits due mainly to the viability of the accompanying revised business plan that envisions positive cash flow from operations over the next five years. Since the onset of the regional financial crisis in July, 1997, the company has instituted drastic cost-cutting measures and implemented a strategic shift in its marketing focus. And in order to cut risks by reducing dependence on homebuyers relying on government financing, the company has intensified its operations in the middle level of residual segment. In what appears to be a clear reflection of the quality of its leadership and marketing savvy, C & P Homes has assumed dominance on the middle-income housing segment in just a short span of time. It still remains the biggest in the socialized and low-income sectors in terms of completed projects. prcd A P3.2 billion additional subscription from existing stockholders and the sale of 632 million worth of shares to a group of foreign investors boosted the company's capital stock recently by P3.8 billion as of end October this year. C & P Homes has an authorized capital of P15 billion.