Retail and  wholesale chain Uniwide hits SEC order to dissolve company as 'unfair'

Uniwide Holdings Inc., the financially-challenged retail and wholesale chain, on Monday criticized a Securities and Exchange Commission order to dissolve and liquidate the company a “unfair.” 

 

The company has substantially liquidated a substantial portion of obligations to creditors, Uniwide Group of Companies president Jimmy Gow noted a disclosure to the Philippine Stock Exchange. “The records will show that obligations were substantially paid in 2010 and the obligations due to creditors were substantially reduced,” the disclosure read.

 

"As early as December 2012, urgent motions were filed to withdraw from the SEC as Uniwide will negotiate with its creditors and because it believes it is on the road to recover its financial standing. The motion was not acted upon and a Mandamus Case was filed with the Court of Appeals where it is pending resolution," the company added.

        

Last week, SEC ordered the dissolution and liquidation of Uniwide Holdings and five other companies under Uniwide Group of Companies—Naic Resources and Development Corp., Uniwide Sales Realty and Resources Corp., First Paragon Corp. and Uniwide Sales Warehouse Club Inc.

 

In a 2009 decision, SEC special hearing panel decided to terminate the Uniwide Group's rehabilitation plan for failing to comply with the terms approved in 2002. The panel concluded Uniwide Group has shifted from a company that was “solvent but distressed” to a “technically insolvent” group.

 

Uniwide had plans to settle its debts with secured creditors under a dacion en pago arrangements according to provisions of its rehabilitation, while the supermarket chain generates cash from the sales and operations of existing stores

 

However, the corporate regulator noted the planned dacion en pago— or loosely a special payment in kind, usually property—with Allied Bank, Philippine National Bank, LNC SPV-AMC Corp. and other secured creditors failed after some creditors refused to comply with the terms of the rehabilitation plan.

 

With many Uniwide stores closed, the supermarket chain failed to raise enough money through sales, according to SEC. 

 

On top of that, there was a lack support from suppliers for the company’s supermarket operations and a rise in unprogrammed operating expenses, it added.

 

At the filing of the petition for rehabilitation on June 25, 1999, Uniwide group operated 8 warehouse clubs and 2 department stores with total assets of P19.86 billion and total liabilities of P11.1 billion.

 

However, SEC said that as of end-2008 the number of Uniwide stores was down to 5 warehouse clubs and one department store. While the group’s assets were almost depleted at P2.7 billion, its liabilities  ballooned ballooned to P12.3 billion, it added. — VS, GMA News