The capital build-up program that will give current shareholders the option to convert the bank’s IOUs into equity was approved during the first organizational meeting Tuesday night of the newly-elected 15-man board.
Although details of the bond issue have still to be firmed up, Government Service Insurance System president and Equitable PCI Bank director Winston Garcia told The STAR yesterday the pension fund will not participate in the bank’s capital build-up program.
"I do not want to waste good money on a bad investment."
Social Security System chairman and president and fellow bank director Vitaliano Nañagas II took a different position. "SSS will support the bank and will make sure it achieves its position as the country’s third largest bank," he told The STAR.
The capital build-up is expected to help soften the stand of the Bangko Sentral which extended last January a P30-billion three-month emergency loan to Equitable PCI Bank. At that time, the bank experienced massive withdrawals brought about by the involvement of former bank chairman George Go in some accounts of former President Estrada in the bank.
The bank has already repaid P20 billion of the emergency loan. It wants to, however, lengthen the maturity of the remaining P10 billion to five years.
In the last few months, Equitable PCI Bank has been actively looking for a strategic partner who will bring in new capital. Three groups – the Gokongwei holding company JG Summit Holdings Inc., the Fubon Group of Taiwan, and venture capitalist Newbridge Capital of the US – submitted their proposals after doing their due diligence but their offers were turned down by the board.
The board initiated the capital build-up program not because the bank is capital deficient but because it wants to keep its standing as the country’s third largest commercial bank.
During Tuesday’s annual stockholders’ meeting, the board accepted the resignation of president Wilfrido Vergara. Appointed acting president is senior executive vice-president Edilberto Javier.
The board moved up chairman Peter Go Pailian to chairman emeritus. Mr. Go’s brother, Antonio Go, was elected chairman.
Also elected to the board were two other Go brothers, John and Frank. The fifth board seat controlled by the Go family was given to Ricardo Leong, the brother-in-law of John Gokongwei, Jr.
The Social Security System, which controls four board seats, voted in chairman and president Vitaliano Nañagas II, executive vice-president Horace Templo, and assistant vice-presidents Rizaldy Capulong and Luz Generoso.
The Government Service Insurance System voted its bank shares in favor of president Winston Garcia and executive vice-president Roberto Malonzo.
Martin Romualdez represented the seven-percent stake of the family of former Leyte Gov. Benjamin Romualdez.
The three board seats representing small investors went to Vergara, Peter Go Pailian’s daughter Genevieve Go; and Equitable Network chief executive officer Anthony Conway.