Tobacco Facts.

Philippine Tobacco Flue-Curing and Redrying Corp. (PTFCRC) in increasing its loan to subsidiary Baesa Redevelopment Corp. (BRC) for the development of its warehouses in Quezon City into a commercial center.

In a filing to the stock exchange, PTFCRC inked a supplemental loan agreement with BRC to increase its loan from P40 million to P75 million.

“It was determined by [BRC] that the aforementioned amount is not sufficient to cover the costs for the redevelopment of [the] warehouse properties,” said the company in a statement.

Also included in the agreement is an option for PTFCRC to increase the amount beyond P75 million should the subsidiary deem the funding insufficient. Interest on the loan, originally pegged at 8 percent per annum, was reduced to 6 percent.

PTFCRC owns the property which currently houses five warehouses BRC and is covered by a lease contract. In its most recent filing, the parent firm said renovation for Warehouse 1 is ongoing and is estimated to cost P116 million. Negotiations for potential clients are “underway,” said the company.

Last year, PTFCRC said a primary client for the redevelopment, located in along Quirino Highway in Baesa, Quezon City, will be a Robinsons Supermarket.

PTFCRC said the planned commercial project is expected to serve nearby areas of Caloocan, the northern part of Quezon City, and even up to Valenzuela.

Up to May 31, PTFCRC reported a 16.9-percent increase in net income to P6.96 million. Revenues rose 2.4 percent to P51.27 million, the bulk of which were generated from rental income from the warehouses.

PTFCRC was incorporated in March 1951. In 1994, it consolidated its tobacco operations in Candon, Ilocos Sur. The company’s tobacco operations had been incurring losses primarily due to declining export and domestic prices, both in terms of volume and price.

Since there were no prospects of a turnaround in the near future, the company decided to phase out the tobacco business in 2002. The facilities are currently offered short-term lease agreements and tolling deals.
© Copyright: Businessmirror

Related posts:

1. Smokeless tobacco bill could help recruit doctors An increase in state taxes on smokeless tobacco supported by...