A month after the closed bank, now known as Misamis Occidental Cooperative Bank (MOCB), was ordered closed, nine investors, composed of eight cooperatives and one cooperative rural bank, signified intentions to undertake the rehabilitation of CRB Misamis Occidental by infusing fresh capital amounting to P12.41 million.
At the same time, 40 individual investors, all depositors of the closed CRB Misamis Occidental, proposed to convert their uninsured deposit liabilities in the amount of P8.75 million into equity.
PDIC acting president Michael A. Osmeña said that the rehabilitation of MOCB shows the commitment of government financial regulators to strengthen the public’s confidence in the stability of the banking system as well as assisting the best interests of the rural economy.
He said that any bank rehabilitation is guided by the principle of reasonable burden sharing among the bank’s stakeholders namely: shareholders, strategic third party investors, depositors/creditors, and government.
"It is important that the scheme upholds good governance and present the strongest prospects for long-term viability and sustainability based on the strength of investors and quality of the rehabilitation plan, " Osmeña added.
The MB approved the rehabilitation of the bank in August 2004.
In approving the rehabilitation, the BSP directed the bank to comply with conditions imposed by the PDIC such as amendment of the bank’s articles of cooperation, increase in its authorized capital stock, conversion into equity of the bank’s uninsured deposit liabilities as well as bills payable to the Cooperative Development Authority (CDA), approval of the P1-million equity investment of CRB Misamis Oriental, limiting the shareholdings of First Community Cooperative (FICCO) to 40 percent of the subscribed capital stock and allowing other or new shareholders to subscribe to the 23 percent excess capital committed by FICCO.
The articles of cooperation likewise increased the authorized share of capital from P10 million to P100 million and gave MOCB the authority to register with the CDA.
The investors likewise complied with the required minimum amount of P12.41 million as fresh capital for the rehabilitation and deposited said amount in escrow with the Land Bank of the Philippines (LBP). The uninsured deposit amounting to P8.75 million, on the other hand, was converted into non-redeemable and non-cumulative preferred stock through a subscription agreement.
The investors also settled the receivership expenses incurred by PDIC as of Sept. 30, 2006 subject to adjustments through offsets against Funds Held-in-Trust by PDIC as of Oct. 31, 2006.
The coalition of cooperatives and cooperative rural bank that rehabilitated the bank were the Cooperative Rural Bank of Misamis Oriental Inc.; First Community Cooperative; Philippine Federation of Credit Cooperatives; DMPI Employees’ Credit Cooperative; DMPI Employees’ Consumer Cooperative; Paglaum Multi Purpose Cooperative; Oro Integrated Cooperative; Clarin National High School FMPC; and Del Monte Philippines, Inc. Employees’ Agrarian Reform Beneficiaries Cooperative.