PDIC moves deadline for sale of 67% stake in PBCom

MANILA, Philippines - The Philippine Deposit Insurance Corp. (PDIC) has agreed to move the deadline for the sale of Philippine Bank of Communications (PBCom) to March this year, from an earlier timetable of end-2009.

PDIC has been negotiating for the sale of a 67-percent equity in PBCom controlled by three groups of major stakeholders. It has therefore set a one-year extension based on the original treaty stating that the equity sale must be concluded by March 2009.

“Since they are in serious talks, we have decided to extend again the deadline for the liquidation and sale of the majority equity of PBCom to end March this year,” Jose C. Nograles, PDIC president, said.

The Macquarie Group, which was tapped as financial advisor, has been negotiating with prospective buyers of PBCom.

By virtue of a financial assistance agreement (FAA) signed in March 2004, PDIC extended a P7.6-billion financial assistance to PBCom due to huge losses. In turn, PDIC took four seats in the bank’s board to protect government interests.

The financial assistance had a 10-year maturity period.

The FAA states that within a five-year period or by March 2009, the combined majority stockholders accounting for 67-percent of total outstanding stocks must sell its holdings. The Luy, Nubla and the Chung blocks are the majority stockholders of the bank.

Failure to sell the 67-percent combined majority stocks will automatically empower the PDIC, under the FAA, to take over the sale of the block.

In the end 2009 extension given by PDIC to the Macquarie Group, Nograles said that with its advanced stage of negotiations with potential investors, “we should give it until end of the year. I think a firm offer is about to be made, which has to be presented to the stockholders.”

Meanwhile, sources within the PDIC said the sale of the Export and Industry Bank (EIB) is still in the early negotiating stage. The commercial bank received a rescue package of P9 billion from government.

Stakeholders of EIB want to sell both bad and good assets to the prospective buyer, reportedly Banco de Oro Unibank Inc. (BDO).

But sources within BDO said that they are only interested in the good assets being marketed by EIB.