Dec 20, 2007 - 10:58:43 AM
LEGAZPI CITY, Dec. 21 (PNA) --- Lafayette Mining Ltd, announced on Thursday that the Rapu Rapu Group is filing a petition for rehabilitation, not bankruptcy as earlier reported in the media.
Lawyer Bayani Agabin, legal counsel of
Agabin clarified this matter as news broke out that the mining firm has declared bankruptcy.
He explained “bankruptcy would mean mining operations stop, people would be laid off and the remaining assets sold but this is not the case at hand.”
Agabin said the project is viable but needs breathing space as far as paying obligations is concerned. “It is not closing down, is definitely not bankcrupt, and simply needs time to get back on its feet by being allowed to suspend payment of its present obligations.”
While payment to creditors and suppliers will be suspended, they will also be required to continue providing services and supplies and would be paid on a cash basis.
The Rapu Rapu Group of Companies will seek court protection this week from creditors following a decision by Lafayette Mining Ltd to go under voluntary administration.
Carlos G. Dominguez, chairman and president of Lafayette Phils., which oversees the Rapu Rapu Group, said the local units will file a petition for rehabilitation so it can continue normal operations, which is the best way to protect all its stakeholders, particularly its host communities, employees, and the environment.
The rehabilitation petition is expected to result in a court order instructing the group’s present creditors and suppliers to continue their services and transactions with the local companies for as long as they are paid on cash basis.
Under the rehab petition payment for existing debts will be suspended until the court has approved a rehabilitation plan that will fairly settle all outstanding debts and ensure the continued operations of the company.
The voluntary administration of LML was reached after its board deemed that it could not continue to meet its obligations as and when they fall due.
Dominguez, in a press statement, said “this temporary legal process we are going through is actually a blessing for the Rapu Rapu project because it will resolve the financial issues the local management team has been urging LML to address.” (PNA)