Pardo seeks formal pact with Tan on PNB shares

The government has to secure first a formal memorandum of understanding with business tycoon Lucio Tan to sell his stake in the partly state-owned bank together with the government's 30-percent stake.

Finance Secretary Jose T. Pardo admitted yesterday that Tan has reportedly agreed to sell his shares in PNB together with the government and some foreign funds that would allow for a block sale of up to 93 percent of PNB.

However, Pardo said that Tan's supposed agreement was conveyed through a third party which is why he would like to get proper documentation on the agreement for a "one for all, all for one sale."

Tan reportedly has about 46 percent of PNB shares, government has 30 percent while Templeton Asset Management has about 12.9 percent and the PNB Retirement Fund Inc. four percent for a total of 92.9 percent.

With such a big block, Pardo said government is more likely to get a premium for PNB.

Tan has reportedly indicated that he is willing to sell his shares at P160 per share. If Tan is able to sell the block at this price, he will realize about P14.84 billion

Tan acquired his 46 percent stake in PNB by acquiring the subscription rights of the National Government totaling about 11 percent and buying other shares through the market, his relatives and investment houses.

The government's subscription shares were actually assigned to the PNB Retirement Fund Inc. which, in turn, created three special purpose vehicles which secured a P3.3 billion loan from Tan using the shares as collateral. The SPVs then gave Tan their proxies and voting rights.