RFM defers payment of cash dividends

RFM Corp., a Philippine food and beverage group, said it deferred payment of quarterly cash dividends for preferred shareholders due 11 October.
The company also deferred the redemption of preferred …

RFM Corp., a Philippine food and beverage group, said it deferred payment of quarterly cash dividends for preferred shareholders due 11 October. The company also deferred the redemption of preferred shares. RFM will first focus on settling obligations arising from its US$ 65 million 10-year bonds, it said in a disclosure to the stock exchange. RFM Corp. unit, RFM Capital Ltd., issued the bonds in May 1996 and RFM Corp. guaranteed the same. RFM had earlier deferred payment of quarterly cash dividends for preferred shareholders due 11 July because of negotiations with bondholders. “The holders of RFM preferred shares are entitled to receive dividend, which is cumulative in the years when no dividend is declared,” said RFM. In May 2001, RFM was seeking to delay redemption of the bonds due to a “temporary cash-flow mismatch”. The bonds will mature in 2006. The terms also provide for RFM“s redemption of the bonds at 128.71% of face value starting 30 May 2001 from bondholders who choose not to convert their bonds into shares. RFM has assured it will be able to meet its bond obligations in due time through asset sales. This is all the more feasible now, following an agreement signed by the company in August 2001 for the sale of its Cosmos Bottling Corp. unit to food and beverage conglomerate San Miguel Corp. The sale is valued at PHP 15 billion.