CUC total liabilities: $215.5M

As of March 31 this year, the Commonwealth Utilities Corp.’s total assets was at $129.9 million, but its total liabilities was a staggering $215.5 million, according to the latest CUC statements of net deficiency.

In citing the CUC statements, Sen. Maria Frica T. Pangelinan asked if the legality of CUC filing for bankruptcy has been explored or discussed.

Based on the statements, Pangelinan projects that by Sept. 30, 2008, CUC’s deficit net worth would be $95,672,808.

The CUC statements provided to the Senate indicate that as of March 2008, CUC’s total assets amounted to $129,859,453. The total liabilities was at $215,545.513.

Pangelinan, who chairs the Senate Committee on Fiscal Affairs, told Saipan Tribune yesterday that based on the statements, CUC is “basically bankrupt.”

In her comment and analysis of the statements, Pangelinan pointed out that Public Law 15-12, which was enacted in June 2006, had written off some $45,500,000 in liabilities. Supposedly, if it had been written off, the senator said, the total liabilities should only be $170,045,513.

Pangelinan said the total adjusted current liabilities (minus the $45.5 million written off) is $161,996,773.

She said the interest payable continues to climb at a rate of approximately $10 million per year, but CUC’s net worth is declining by approximately the same amount.

The senator said CUC is paying interest expenses, but the total amount due continues to increase by about $10 million each year.

“If the difference between the interest payable amount from March 31, 2008, and from Sept. 30, 2007, is multiplied by two, the estimated interest payable amount for the end of the fiscal year will be approximately $127,299,727,” Pangelinan said.

CUC, she noted, is on track to have a deficit net worth of $95 million at the end of this year.

“According to the statements, the net worth of CUC has declined in the first six months of FY 2008 by approximately $10 million,” the senator said.

If the trend continues, she added, that amount will be approximately $20 million.

Pangelinan asked whether CUC could be turned around without privatization.

She also questioned, among other things, if it is likely that CUC will need additional outside financial resources during FY 2009.