Sarmiento family still controls Vitarich

MANILA, Philippines — Management control of pioneer integrated poultry producer Vitarich stays with the Sarmiento family after a debt-to-equity swap with Kormasinc, Inc.

The debt-to-equity conversion has reduced the company’s previous P3.25-billion debt to a “manageable P800 million,” Vitarich COO Ricardo Manuel M. Sarmiento stressed in a media briefing on Tuesday, September 24.

“There is no talk about change in management, the conversion is primarily to reduce debt. The Sarmiento family will continue its management,” Sarmiento said.

Kormasinc now owns more than 70% of Vitarich shares after serving as a white knight investor whose function as a creditor is to absorb the debts of Vitarich. 

About P2.38 billion debts were converted into shareholders’ equity at a 1:1 ratio, or 1 share of common stock for every P1.00 debt. 

This marks their “first major step” towards reaching the exit from their rehabilitation plan, Sarmiento explained.

He added they are projecting payment of the remaining P800-million debt in one to 2 years.

Vitarich filed for rehabilitation on September 2006 after being severely hit during the Asian financial crisis in the 1990’s, when cost of doing business, including interest and exchange rates, soared to record highs. It used to employ a thousand but was forced to reduce it to 400 to weather the crisis.

The end of its rehabilitation is scheduled on May 31, 2022.

Founded by Sarmiento brothers Feliciano, Lorenzo and Pablo, Vitarich is among the oldest feeds producer in the Philippines. It primarily engages in the formulation, production, storage and marketing of various animals and aqua feeds produced in various forms. 

It is headquartered in McArthur Highway, Abangan Sur, Marilao Bulacan with feed mills in Iloilo and Davao. –Rappler.com