Pre-need firm College Assurance Plan Philippines Inc. has been given the green light by the Bangko Sentral ng Pilipinas (BSP) to sell its shareholdings in Bank of Commerce to a private equity fund owned by Australian gaming and media tycoon James Packer.
Informed sources said the Monetary Board, the policy-making body of the BSP, approved Thursday the sale of CAP’s 19 percent stake in Bank of Commerce to Arctic Capital, which will raise around P800 million.
A total of P1 billion is estimated to be raised from the sale inclusive of the proceeds from the sale by CAP Retirement and CAP Pension of their shareholdings in Bank of Commerce.
The sale forms part of CAP’s approved revised rehabilitation plan which calls for the disposal of non-core assets to pay benefits of planholders.
CAP filed for corporate rehabilitation before a Makati Court after experiencing problems in settling obligations to planholders. Cited as reason for its liquidity problem is the stringent rules imposed by the Securities and Exchange Commission (SEC), which regulates the pre-need industry.
The shares sold represent two seats on the board of Bank of Commerce, the source said.
The same source said CAP wanted out of Bank of Commerce before its stake gets diluted when Southeast Asia’s largest conglomerate San Miguel Corp. beefs up its stake in the mid-sized bank to 51 percent from the current 34.3 percent.
Earlier reports said San Miguel would subscribe to Bank of Commerce’s increase in capitalization from P4 billion to P6 billion.
In April this year, San Miguel and its retirement fund unit purchased 10 million common shares of Bank of Commerce at P200 each for a total of P2 billion.
The entry of San Miguel and the Packer Group is expected to bolster Bank of Commerce’s bid to become a universal bank, which will allow it to venture into non-allied activities such as property and insurance.
Reports said James Packer was worth AUD$7.25 billion in 2007. His group recently entered into a $1.5 billion deal to build a hotel and casino resort in the Philippines which shall form part of the estimated $20 billion Pagcor Tourism City along Roxas Boulevard.
Bank of Commerce controlled by Antonio “Tonyboy” Cojuangco, intends to use the additional fresh equity for investments in technology and branch network expansion nationwide and to boost loan portfolio.
Bank of Commerce is seen to serve as San Miguel Properties Inc’s retail arm for financing for its various residential condominium projects. SMPI is the property unit of San Miguel.
The services of the bank could likewise be availed of by the San Miguel Group for its diverse and nationwide operations, particularly to service the financing needs of the group’s dealers, agents and wholesalers for depository and payment channels, guarantees, letters of credit, credit lines, loans and discounts.