The new order lengthens the suspension period for debt payments of Urban Bank by another 60 days to May 8, 2001 following the lapse of the fourth extension yesterday.
The SEC said this is to enable Urban Bank to consider another alternative solution to its financial crisis, including the search for another investors following the withdrawal by Bank of Commerce of its offer to rehabilitate the troubled bank.
Last Feb. 22, Bancommerce said it was not pursuing its bid to acquire Urban Bank due to issues tied to the legality of its closure in April last year.
Urban Bank declared a bank holiday and sought refuge at the SEC and the Philippine Deposit Insurance Corp. following a massive bank run which crippled its ability to cover its deposit liabilities of more than P8 billion.
The bank’s collapse was attributed to the highly-abnormal sale by Urban Investments to Urban Bank of P4.6 billion worth of debt papers of companies with doubtful capacities to pay, hence depleting the bank’s cash and quick assets.
Last month, SEC Chairman Lilia Bautista said Urban Bank started negotiations with several unidentified investors and would draft a new rehabilitation plan that would be more viable than that offered by Bancommerce.