In a disclosure to the Philippine Stock Exchange, FSTE first vice president and corporate information officer Elmer Nitura said the bank’s board of directors had approved the business plan to transform into a holding company and change its corporate name to Prime Media Holdings Inc.
"The business plan of the company is to convert itself into a holding company and persuade investors to inject assets into the company in exchange for shares of the company," he explained.
The new plan was formulated with the assistance of global financial conglomerate ABN-Amro following the bank’s Sept. 25 memorandum of agreement (MOA) with BDO. Under the MOA, BDO will assume the banking business of FSTE, thereby increasing its deposit base by about P10 billion, its customers by around 80,000 mostly from small and medium-scale enterprises, and an additional 57 well-distributed branches.
Late last October, BDO started taking over the operations of FSTE, in the process assuming P10 billion worth of assets and liabilities, the bulk of which are in the form of deposit liabilities valued at P8.9 billion.
Nitura added that as an initial step to attract new investors, FSTE will go through the process of cleaning up its balance sheet. Subsequently, the company will focus on assets consisting of holdings in profitable enterprises relating to the media business like radio, cable television and advertising.
He pointed out that if there will be dissenting shareholders on the plan, they may opt to sell out in the stock market or exercise their appraisal rights. "By law, however, the company must first satisfy its liabilities to creditors before it pay the stockholders," Nitura said.