In June 2002, Lopez Holdings Corporation, then known as Benpres Holdings Corporation, declared a standstill on $560 million in debt. It consisted of $190M in direct obligations and $370M in contingent obligations.

The direct obligations consisted of $150M in Eurobonds and P2 billion in long term commercial papers (LTCPs). The contingent obligations were debts of subsidiaries guaranteed by Lopez Holdings acting as the ultimate parent firm. These were $160M for Maynilad Water Services Inc. and $210M for Bayan Telecommunications Inc.

In 2005, a debt and capital restructuring agreement was signed to resolve the various issues that plagued the Maynilad concession. Lopez Holdings wrote off P3.7B in equity and advances, and was released from its guarantees.

In 2007, as the Philippine peso grew stronger, Lopez Holdings bought back some of its debt papers at a discount, using cash dividends received from profitable affiliates ABS-CBN Corporation, First Philippine Holdings Corporation (FPH) and Rockwell Land Corporation. Minority shares held in Digital Telecommunications Inc. were also sold that year as part of the buyback deal.

In 2008, Lopez Holdings sold its stake in First Philippine Infrastructure Inc., parent company of Manila North Tollways Corporation. A noncore asset minority shares in Professional Services Inc., owner of The Medical City was also sold that year for P600M, representing an 8% gain. This allowed Lopez Holdings to buy back $262M in debt at a discount in 2009.

The small investment in The Medical City was in line with the direction of Lopez Holdings to grow its public service portfolio. It was during the participation of Lopez Holdings that The Medical City expanded and built its new main facility on land donated by Manila Electric Company.

Negotiations with creditors continued and Lopez Holdings restructured $24M worth of papers in 2010, followed by a tender offer for all remaining defaulted debt in 2011. In 2012, an additional $5M was bought back at face value. Funding for debt buyback came from dividends provided by ABS-CBN and FPH.

By the end of 2012, or after 10 years of executing its balance sheet management plan, debt stood at $23M. Only P67M in unrestructured LTCPs remain, as holders have not come forward for buyback or renegotiation.(Story by: Carla Paras-Sison)