Ramcar Group of Companies
Ramcar Group of Companies or Ramcar Corporation is a privately-held corporation owned by the Agustines. The company’s primary business is manufacturing batteries under the Motolite, Oriental and Super Power brands. It also owns and operates the quick services restaurants KFC Mister Donut and Tokyo Tokyo. It was also a part of the consortium that invested in the Metro Rail Transit. In 2002, the company underwent rehabilitation to settle its outstanding obligations with its creditor banks.
Ramcar was originally founded as automotive electric shop in 1919 by Don Ramon Caro. Seeing the success of the business, Caro expanded to automotive battery manufacturing under the Oriental brand.
The company pioneered the manufacture of polypropylene casings to become the first company in the country to produce automotive batteries encased in plastic. Ramcar was also the first battery manufacturer to introduce the “Balik Baterya” campaign, in which the customers trade-in their old car battery for a new one.
It was in 1997 that Ramcar merged with C.C. Unson Corporation, the manufacturer of the Motolite brand, to form Oriental and Motolite Corporation.
The battery group is heavily involved in the export business. It has manufacturing and distribution facilities in the USA through Ramcar Batteries, Inc., and a nationwide distribution facility in Australia, Supercharge Pty. Ltd.
Quick service restaurants
In 1994, Ramcar acquired the franchise over the sales and distribution of the KFC products. A year later, Ramcar it acquired the master franchise of Mister Donut through its subsidiary, Food Fest, Inc.
In 2008, the company bought the Japanese fast food restaurant Tokyo Tokyo from Ivan Ramos for P1 billion, funded through a leveraged buyout arranged by Banco de Oro Unibank.
Metro Rail Transit
In the late 1990s, Ramcar was part of the consortium that was awarded the contract for the MRT-3 rail project. The other consortium members were Ayala Land Inc. (Ayalas), Greenfields Development Corporation/Unilab Group (Camposes), Anglo-Philippines Holdings Inc./National Bookstore (Ramoses) and the Fil-Estate Corporation (Soprepenas). A few years later, because of the decision of the government to securitize and sell the rail operation’s cash flow, the consortium members, which included Ramcar, decided to sell its stake on the project.
Receivership and revival
In 2001, Ramcar was saddled with some P7.6 billion debts incurred during the Asian Financial Crisis. The company was affected with the sky-rocketing interest rates after the Bangko Sentral ng Pilipinas hiked interest rates to defend the local currency. In December 2001, the company filed a debt moratorium or suspension of payment as it is unable to meet the demands of its creditors.
In January 2002, the Quezon City Regional Trial Court (RTC) issued a stay order and prevented its creditors from seizing the company’s assets. The amendment for rehabilitation plan was amended twice in December 2002 and in February 2003 before it was finally approved by the court in August 2003. Ramcar initially proposed debt-for-equity but in the end, the bank creditors settled for dacion en pago.
Out of a total P7.6 billion debts, about P6.1 billion-worth in unsecured bank debts was settled via dacion en pago, which included personal properties and parcels of land; while the P1.5 billion of secured debt, on the other hand, were restructured.
By 2006, Ramcar was able to climb out of receivership after implementing the court-rehabilitation program. Its structured debt was trimmed down to just P500 million. In 2008, Ramcar used the P1.3 billion additional paid-in capital from Ramcar Holdings, Inc. to wipe out its remaining P761.98 million debt. The additional paid-in capital came from the conversion of Ramcar’s debts into equities.
- Court grants Ramcar bid for debt relief
- Ramcar trims debt to P500 million, climbs out of receivership
- Ramcar zaps rehap woes
- Philippine Institute for Development Studies: Special Purpose Vehicles and Insolvency Reforms in the Philippines
- [ http://www.mb.com.ph/articles/192855/ramcar-undergoes-equity-restructuring-erase-deficit Manila Bulletin online: Ramcar undergoes equity restructuring to erase deficit]
- [ http://www.abs-cbnnews.com/business/03/08/11/ayala-corp-may-bid-mrt-3 ABS-CBN News: Ayala Corp may bid MRT3]