IT’S business as usual for Negros Navigation Company (NENACO) after the Maritime Industry Authority (MARINA) last week lifted the suspension order on five of its vessels.
MARINA earlier found NENACO to be “financially unstable” based on financial statements as of December 31, 2003. The order was lifted after the shipping line submitted revised audited financial statements reflecting the reclassification of its current liabilities into long-term liabilities.
Sulficio Tagud, Jr., the Court-appointed rehabilitation receiver of NENACO, said the financial statement “must be qualified by the fact that the Stay Order, which the Regional Trial Court of Manila, Branch 46 issued on April 01, 2004, prohibits NENACO from making any payments of its outstanding liabilities as of March 29, 2004; parenthetically, its creditors are proscribed from collecting their claims against NENACO; and based on the proposed rehabilitation plan, the obligations of NENACO are stretched up to ten (10) years.
Thus for purposes of computing the capitalization under the formula in Memorandum Circular No. 161, NENACO’s obligations should not be considered as CURRENT but as LONG-TERM LIABILITIES.” The shipping firm is under a court-approved rehabilitation program which aims to implement a debt reduction and restructuring program to address consolidated debts and trade payables of approximately P2.5 billion.
Based on audited financial statements as of December 31, 2003, the shipping line had a positive net cash of P470,629,038 and P306,037,726 for operating activities in 2002 and 2003, respectively. NENACO’s passenger insurance requirement was also found to be sufficient.
The M/S St. Peter the Apostle sailed to Bacolod on Wednesday after receiving a 30-day special permit from the maritime agency. Clearances to operate were also given to St. Joseph the Worker, M/S San Lorenzo Ruiz, and M/S Princess of Negros.
The M/S San Paolo received a provisional authority until May 28. NENACO disclosed more than P75 million in potential revenue was lost from combined freight and passage operations and an estimated 20,000 passengers affected by the temporary suspension.
