December 19, 2007
Updated 18:03:08 (Mla time)
LEGAZPI CITY, Philippines -- Indebted by almost $240 million, the Rapu-Rapu group of companies operating a copper and zinc mine in Rapu-Rapu island town in Albay will seek court protection from creditors even as it denied claims by anti-mining groups that the mine firm has gone bankrupt.
Carlos G. Dominguez, chairman and president of Lafayatte Philippines Inc., which oversees the Rapu-Rapu group of companies, said they are filing a petition for rehabilitation so the mining firm can continue normal operations.
"It is the best way to protect all our stakeholders, particularly, our host communities, employees, and the environment," Dominguez said in a press statement sent to the Inquirer on Tuesday.
Earlier, the board of directors of Lafayette Mining Ltd., parent firm of LPI, decided to subject the company under voluntary administration after it "deemed that it could not continue to meet its obligations (to the creditors)."
Voluntary administration, according to Australian website www.bankrupt.com.au, is a mechanism for companies in financial distress to obtain some breathing space from its creditors.
It is a procedure under Australian law that allows a company to avoid liquidation and to have the company administered in such a way that maximizes the chances of the company and its business to continue, or if it cannot continue, to allow a better return for the company's creditors and shareholders.
Clemente Bautista, convener of anti-mining alliance Defend Patrimony, said that "voluntary administration" simply meant that the Australian-owned mine firm has gone bankrupt and that the banks are now taking over their operations.
However, Bayani Agabin, LPI spokesperson and legal counsel, said the company is not bankrupt because its debts have not exceeded its assets.
"It is the best strategy to make the continuing of our operations viable," Agabin said in mobile phone interview.
He said the petition for rehabilitation, once granted by the Philippine court, will protect the company from cases to be filed by creditors.
Agabin said the petition will go with a company rehabilitation plan which shall consist of strategies to resolve the company's financial issues with an assurance to the creditors that it will be able to pay its debt in the future.
He said a rehabilitation plan might take between two to 10 years to implement.
Agabin explained that the mine firm's heavy debt burden was caused by the long periods of suspension by the government after the mine tailings spill in 2005.
He added that the calamities that struck the province, like supertyphoon "Reming" late last year, also inflicted losses on the company's assets.
LPI operates a 180-hectare open pit mine occupying 81 percent of the island town's land area.
Its operations have been highly-criticized by anti-mining groups, who have been blaming the mining company for tailings spills and fish kills since 2005.