Preneed firm seeks rehab
By Jenniffer B. Austria
Another preneed company has filed for corporate rehabilitation with the Makati Regional Trial Court, the fourth to do so after industry funds failed to cope up with rising tuition.
Professional Financial Plans, formerly TPG Corp., sought the help of the
TPG filed the petition on Feb. 7. It was the fourth preneed company to seek rehabilitation after College Assurance Plan Philippines Inc., Platinum Plans Philippines Inc. and Pacific Plans Inc.
Professional Plans chairman Francisco Colayco said in a press conference yesterday that the company sought court solution to implement its proposed Scholar Trust Fund with Equitable Pay-outs for Unified Preservation, or STEP-UP.
“The word rehabilitation is often taken negatively. But in this case this is a welcome opportunity because only through the STEP-UP program that we will be able to give benefits to planholders,” Colayco said.
The company earlier asked the Securities and Exchange Commission to approve the implementation of STEP-UP. The SEC instead asked the company to secure approval of all planholders before clearing it.
“Given that 100 percent approval is not only highly improbable but physically impossible, the only available option to ensure achievement of the STEP- UP objectives is to seek mandate for its implementation,” Colayco said.
TPG conducted about 800 sessions with planholders to get their approval of STEP-UP. Only 12,000 planholders out of 28,000 agreed to the implementation of the scheme.
Colayco said some planholders rejected STEP-UP because of reduced benefits.
The STEP-UP program puts a 15 percent cap on the benefits of traditional planholders and offers noncash portion of the payouts in terms of shares into the company.
The program also redefines the benefits of fixed value education and pension plans without lowering their value.
TPG asked the court in its petition for rehabilitation to allow the company to use proceeds of its P900 million trust fund for diversification into a financial holding company that will engage in financial, credit and micro-lending services.
The company also plans to establish one or two colleges in Visayas and
The plan also seeks to pay pending education plan availments for school year 2005-2006 and pension plan maturities.
TPG’s trust fund is currently valued at P900 million and has assets of P1.1 billion. Liabilities, however, stood at P1.3 billion.
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