The move is said to be a precondition to the completion of ongoing negotiations between Keppel IVI and food and beverage giant San Miguel Corp. for the acquisition by the latter of the investment house.
While it no longer operates, Keppel IVI has an existing license to engage in the investment banking business. It continues to renew its license every year. It suspended operations in 2001 due to financial difficulties brought about by scarce trading opportunities, and the uncertainties in the economic and political fronts.
Keppel IVI’s meager profits from local trading were no longer enough to cover for fixed and overhead costs to sustain full operations.
"They still maintain a license. It is beneficial should they decide to sell the company," Aquino said.
Aquino said the acquisition of an existing investment house appears to be more prudent as the Bangko Sentral ng Pilipinas has imposed a moratorium on the acceptance of new investment houses.
An investment house is an entity that handles initial public offerings, private placement of shares, and commercial paper flotations. It also serves as advisors to companies planning to merge or acquire other firms. An analyst at a local brokerage house said acquisition by SMC of an investment house seems practical as the company is known for making a lot of deals with various companies.
For the next two to five years, the company has programmed a lot of acquisitions and investments to further strengthen its dominant position in the local food and beverage market.
As part of the restructuring plan of the Keppel Philippines Group, the financial and banking services business of the group — Keppel IVI, Keppel Bank Philippines (formerly Keppel Monte Bank), and Keppel Securities Philippines, which will eventually be housed under KPH, will be housed under Keppel Philippines Holdings.
Keppel Philippines Holdings, Inc. (KPH) is an investment holding company under the majority ownership of Keppel Group. The company’s investments in the Philippines include shiprepair and shipbuilding, power generation, banking and financial services, engineering and property development.