Elizabeth L. Sanchez
Inquirer News Service
PRE-NEED firm College Assurance Plan Philippines Inc. (CAP) said it was in talks with two prospective investors that might infuse fresh capital that is deemed crucial in its financial recovery program.
CAP said it had also finalized a proposed capital build-up program involving P20.9 billion in trust fund assets over eight years.
The company said it was "now seriously negotiating" with St. Augustine Humanitarian Foundation on an infusion of $4 million a year over the next five years.
It added it was in "serious negotiations" with an unnamed investor that would infuse up to $100 million if CAP could get a dealer's license -- its permit to operate -- which the Securities and Exchange Commission suspended in August last year.
The information is contained in the CAP's reply to an SEC show-cause order threatening administrative sanctions and formation of a management committee to take the company over.
An Inquirer source familiar with the negotiations said St. Augustine Humanitarian Foundation was based in Rome and a part of an "old and rich group willing to support worthy causes."
Under its proposed recovery plan, CAP expects to build up its trust fund assets through infusion of P6.72 billion in equity, accumulation of discounts on its holdings of Metro Rail Transit bonds worth P2.52 billion, and use of proceeds of development and sale of real estate assets.
The real estate assets include the Canyon Woods residential resort in Tagaytay City and the Harbour Town development project in Nasugbu town in the province of Batangas, just south of Manila. Expansion of the Manila Southwoods subdivision is also expected to raise additional P2.64 billion.
In its 40-page reply to the SEC order, CAP is asking the commission to hold off imposition of administrative sanctions, abandon a plan to create a management committee for CAP and to restore its dealer's license.
It said that without its dealer's license it was impossible for it to complete negotiations with potential strategic investors.
It added that a management takeover could only lead to its liquidation, at the expense of its more than 700,000 plan holders.
CAP said the SEC had no authority to form a management committee since its quasi-judicial authority had been transferred to the regular courts.
CAP was incorporated in 1980 as a pre-need company designed to help Filipino families pay for the education of its children. With INQ7.net
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