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CEBU CITY, Philippines - The Waterfront Philippines Inc. (WPI), the owner of the two Waterfront hotels in Cebu, said Tuesday it would fight the foreclosure proceedings of the Philippine National Bank (PNB).
WPI said in a statement that it will exert all legal efforts to prevent this clearly uncalled for action of PNB in order to preserve its rights and protect the rights of the thousands of employees whose livelihood depends on the smooth operations of the hotels.
The statement, which was sent by an official of the Waterfront Airport Hotel and Casino to Cebu Daily News, said Waterfront will surely be affected by the foreclosure proceedings.
WPI was referring to the petition of foreclosure the PNB filed on November 4 against WPI-owned, Waterfront Mactan Casino Hotel, Inc. (WMCHI) and Waterfront Cebu City Casino Hotel, Inc. (WCCCHI), for the hotel chain's failure to pay debts amounting to P740 million.
The WPI said that it was shocked over the premature attempt of the PNB to file foreclosure proceedings against its two hotels in Cebu and Mactan, despite on-going discussions for payment of its loans.
US$30-M loan
?The (P740 million) loan was originally denominated in US dollars at US$30 million, equivalent to a mere P789 million at the time of inception in 1997,? the statement said. ?The loan subsequently doubled its peso amount upon conversion as a result of the devaluation of the Philippine peso.?
WPI said the bank?s foreclosure petition was unfair because the WPI has already paid US$6 million plus P1.2 billion, in both principal and interest in the course of servicing this loan obligation.
WPI also said that the growth in the tourism industry has also assured a steady cash flow and health of the company.
WPI attributed its loan being considered by PNB on technical delinquency to the lengthy negotiations to secure favorable lease terms with its major leasing client, attendant to any lease renewals.
?The lease negotiations have now resulted in a favorable outcome and the company now confirms verifiable cash flows to meet its upcoming loan commitments to the bank,? WPI said.
WPI said there may have been internal miscommunication in the bank that prompted the filing of the petition.
WPI officials have stated that the company is ready, willing and able to meet its obligation with the bank and reinstate the loan conditions prior to the said technical delinquency.
WPI reiterated it will exert all legal efforts to prevent the foreclosure proceedings to protect its rights and the livelihood of the thousands of the hotels? employees.
WPI is headed by its chairman Renato Magadia and its president Rexlon Gatchalian.
Officials of both hotels in Cebu also assured employees and guests that ?it's business as usual and there's nothing to be worried about.?
Not good news
Meanwhile, Cebu business movers expressed varied opinions on the corporate issue between WPI and PNB and whether or not it will affect the growth of Cebu's tourism and furniture industry.
?This is a unique corporate concern between PNB and Waterfront. Both companies are being run by professionals so I'm confident they will resolve this without affecting Cebu tourism,? said Tourism Secretary Joseph ?Ace? Durano.
However, Marisa Nallana, president of Philippine Association of Convention/Exhibition Organizers and Suppliers, Inc. (Paceos), said a worse-case scenario such as the closure of the Waterfront hotels is ?not good news to the industry.?
?Waterfront has made a mark in the hotel business especially in Cebu and played host to major events. Cebu is an important destination and needs all the hotels to accommodate the guests coming into the province or city,? she said.
But Jennifer Franco, chairperson of National Association of Independent Travel Agencies Cebu Chapter, said she believes that hotel services will still continue even as two hotels will be foreclosed by PNB.
?There might be change of ownership and management (if PNB wins its foreclosure petition and the two hotels will be sold) but I don't think they (WPI and PNB) will allow disruption of services. It will continue,? she told Cebu Daily News.
Franco said Waterfront located in Salinas Drive, Lahug is one of the city hotels which tourists prefer when staying in Cebu City.
These are tourists, she said, who prefer shopping and night life over beach resorts.
But in case of service disruptions, Franco said they assure clients that they can be accommodated by other city hotels, which offer similar amenities and facilities.
Asked if the news on Waterfront Lahug's foreclosure will affect the Cebu X furniture show on March 2009, Cebu Furniture Industries Foundation Inc. (CFIF) president Eric Casas said it is ?too premature? to speculate on the outcome of the filed foreclosure petition.
Cebu X
The 20-year-old Cebu X has been held in WMCHI since 1998, the same year the hotel began operations, said CFIF executive director Ruby Salutan.
It used to be held in the defunct Cebu Plaza, now Marco Polo Plaza.
?News of the foreclosure came as a surprise but as far as we are concerned, the hotel has a strong business health.
?I also don't think that they can easily close down the hotel. We still have existing contracts with Waterfront for a couple more years. If the hotel will close down, Waterfront would have contacted its clients,? she said.
If there is a need to transfer venue, Eric Mendoza, president of furniture company Mendco Development Corp., said there are other venue options for Cebu X such as Shangri-La's Mactan Resort and Spa, Cebu International Convention Center and Marco Polo Plaza.
