Winning bidder of PNB to get 'sweetener'

The Bangko Sentral ng Pilipinas (BSP) will give extra incentives to the successful bidder of ailing Philippine National Bank (PNB), BSP Gov. Rafael B. Buenaventura said over the weekend.

Buenaventura said the "sweetener" could include the continued authority of the bank to accept government deposits, a rehabilitation plan for the bank, incentives that could include revaluation of properties, and continued branch access to government facilities.

Buenaventura, however, clarified that the BSP or the government will definitely not agree to absorb any non-performing loans (NPLs) of the bank as part of its rehabilitation even if some of the loans are so-called "sweetheart political loans" granted in the past.

The sale of PNB, Buenaventura insisted, is on "as is, where is," basis which means that the buyer must buy the bank, including all of its bad debts.

Buenaventura said that another auditing firm, Arthur Andersen, has been hired by PNB to conduct a final "due diligence" audit that will again go through the separate audit conducted by Pricewaterhouse Coopers, Punongbayan and Araullo and SGV.

Arthur Andersen will also do an audit of PNB's finances from January to March this year completing the financial audit of the bank.

The Arthur Andersen audit will also help in valuating the shares of the bank.

Buenaventura said the government is still eyeing a May 15 bidding of PNB with the sale price to be agreed upon by both the government and business tycoon Lucio Tan.

"Tan has indicated some flexibility with regard to the P160 per share price that he had initially insisted," Buenaventura said, adding that "Tan has apparently softened his price stand following the discovery of PNB's true financial situation."

Bank analysts have repeatedly said that a P160 per share price may not be attainable and that at best it could be between P120 to P140 each on the assumption of a premium of two times the book value of the bank.

PNB's current book value is only P70 per share.