 |
|
Is
Nenaco rehab for public good? We received a barrage of letters from reacting Negrenses on a past BizLinks article ("Who benefits in squeezing Nenaco out," April 1). Boy, was I surprised with the depth of feelings, both for and against, the issue. Here are excerpts from some of the letters sent. This is from Fernando Lacson. Here is part of what he has to say: "I am from Negros Occidental and perhaps, due to a sense of security because of its record of seaworthiness, I do not take any vessel except NN whenever I go home to the province. (Thank you Lord, otherwise I could have been one of those charred beyond recognition when the SuperFerry 14 got burned!) "Moreover, as an Ilonggo, I feel I am already at home in Negros once I step on the gangplank of any of NN’s vessel in Manila. May I say that over the years, NN has built a reputation in such a way that it is as if it’s a part of the province heritage and could probably be the last bastion of the Negrense pride after the collapse of the sugar industry. "Going back to your topic, I believe that the Philippine Airlines (PAL) case would be the most appropriate doctrine to follow. Some five years back, PAL filed a petition for rehabilitation, yet its operations were not hampered or threatened of closure by the ATO. I understand that the concept of air-worthiness as compared to sea-worthiness is even stiffer. I have not read the basic petition of NN but logic will tell us that by its filing, NN believes that it still has the ability to ‘bounce back‚ if given a breathing room. "I think it is obvious from the language of the law authorizing corporate rehabilitation that its purpose is to give the applicant company ‘some breathing space‚ so that it can survive and pay off their liabilities in due time following the rehabilitation plan. "Thus, when a petition is in due form and substance, the court, motu propio, issues a ‘stay order’ whereby all existing and potential cases are held in abeyance pending the result of the rehabilitation plan that will be submitted by the petitioner. "When MARINA issued the order stopping NN from operating, is a contravention of the very essence of the law on corporate rehabilitation. I would say, that it is as if the left hand does not know, what the right hand is doing. "It is therefore with great sadness that I agree with you 100 percent when you said, ‘there is no doubt that a squeeze play is being employed against Nenaco, the country’s oldest shipping firm’. It is even more sad because an arm of the government allowed itself to be used as tool in this dastardly act." Reader J. Josol, on the other hand, sent me a long enumeration of ‘lies’ and ‘truths’. Due to space considerations, I have taken the liberty of taking what I deem are the more important points. Here are some of his arguments: "Negros Navigation has been untrue with their books or financials to give a picture of profitability to the company. Company auditors resorted to changing their depreciation system to ‘cover things up’. In short the company has been ‘cooking its books’. "The profits were not there. They never were. Expenses were capitalized. Possibly many expenses were not recorded. Negros Navigation was kept alive by not paying its suppliers. Supplier debt went from P500 million or so to P1.5 billion or so over three years. Negros Navigation used supplier financing to pay off employees, to pay off interest to banks, and to cover losses. "Negros Navigation’s failure has its roots about a decade ago when the company went public. By 1997 they had invested all their IPO funds and another five billion, funded by debt, in buying the wrong ships and in funding operating losses. "Negros Navigation was bankrupt a very long time ago. Bad managers together with bad bankers giving money to badly managed companies put them where they were in 1996. It was that time when Metro Pacific Co. wanted to take over San Miguel Corp. "They did all kinds of favors to the powers that be then to get (SMC). One of those favors was the purchase of 51 percent of Negros Navigation with an infusion of P900 million to avert insolvency and bankruptcy. They restated financial statements and proceeded to put in another P4 billion plus to try to fly a steel airplane. The P900 million would have been cheap if they secured San Miguel. They did not, and instead the horror of a P5-billion write-off began. "Metro Pacific’s analysis was that money was all that was needed to turn around Negros Navigation. The business model that brought them to their knees was not altered. This is where the core of the problem lay. "In addition, Metro Pacific did not put any new money to infuse new life into the company. The new Negros Navigation management began playing with their suppliers using the age-old trickle payment techniques." Reader Jesus Palomino commented as follows: "Is it not the fact that if Nenaco simply had paid all of its past due to its creditors, Nenaco wouldn’t have had one of these creditors take action against it? Nenaco is the cause of its own ruin." And lastly, an excerpt from the email of Antonio Jose Lopez Ledesma: "The one that has the most to gain is the government. They will start getting their taxes paid. Why do you not ask why the tax situation has not been brought out into the open before. Four or five years of no payments and no one brought it out. The BIR did not do anything." Judging from the numerous newspaper ads and press releases by both groups, this looks like a conflict with a lot of undertones. The ultimate winner, however, must be the general riding public who only want to reach their destinations safely using the service provider of their choice. It would be a disservice if only one group will gain a monopolistic edge on shipping routes.
| |||
|