Vol. XXI, No. 134
Thursday, February 07, 2008 | MANILA, PHILIPPINES
PROPONENTS of the Rapu Rapu mining project have filed for corporate rehabilitation, describing the move as aimed at conserving assets in the face of outstanding debts.
Bw File Photo
The petitioners said the project incurred debts after it ceased operations in November 2005, when cyanide spills shut down the copper and zinc mine for more than a year. The Environment department allowed operations to resume in February last year.
"The company cannot support the manner by which previous loans were structured because it did not take into consideration the suspension of the mining operations," Bayani Agabin, Lafayette spokesman, said in an interview.
Mr. Agabin said the company has considerable debts from banks and trade suppliers, but declined to say how much exactly was owed. He said the rehabilitation plea also aims to prohibit creditors from closing mortgages.
The statement said the rehabilitation "was deemed necessary by the Filipino management team to protect legal interests." It added that the proponents were in talks with a Korean investor for a possible infusion that would allow them to raise funds for equity, operations, and debt restructuring.
Negotiations, the group said, "might take some time."
The statement also said that once the new investments come in, debt repayments could be resumed.
"For now, it is in the interest of Albay [province], the Rapu Rapu community, our employees and other stakeholders, and the environment to make sure our revenues go into funding our operations first," Mr. Agabin said in the statement.
The Lafayette spokesman also said the petition for rehabilitation did not mean that the company was bankrupt, adding that the Rapu Rapu mine was still a "viable project".
"Rehabilitation is a solution that aims to continue every benefit that we have been providing to the host communities and the people and businesses we deal with," he said.
He also said that the demise of the company managing the Rapu Rapu project would mean that people in Albay would lose their jobs. The company has around 1,000 employees.
The group said it expects to be in rehabilitation for 60 days.The move comes after Lafayette filed for voluntary administration in Australia to avoid bankruptcy. The voluntary administration plea, earlier reports said, was to give the Australian parent firm time to obtain new capital or sell its local unit. — EBD