United Coconut Planters Bank on Monday welcomed the impending sale of the government’s controlling stake in the lender after the high court lifted the halt order issued two years ago against the implementation of executive orders (EOs) allowing the disbursement of coco levy funds.
“As announced by Department of Finance Secretary Carlos G. Dominguez III, the government will soon resume the bank’s privatization through a recapitalization program and sale of the government’s majority stake in UCPB. This will definitely redound to the benefit of UCPB and its clients as this will strengthen the bank’s capital and generate more resources to improve its competitive position in the market,” it said in a statement.
“We will be coordinating closely with the DOF for their next steps, and will provide updates to all our stakeholders as we do so,” UCPB added.
“We would like to assure our clients that it is business as usual for the bank while we go through each phase of this much-awaited recapitalization program, and that they can look forward to a better and stronger UCPB,” the lender said.
Last week, Dominguez disclosed that the DOF would soon start privatizing UCPB, which he said the government is currently supporting with deposits in excess of P40 billion.
The Supreme Court this month lifted the temporary restraining order (TRO) it had issued to implement EO 180 of former president Benigno Aquino III.
To recall, the Supreme Court in June 2015 put on hold the implementation of EOs 179 and 180, which would have set into motion the privatization and reconveyance to the government of about P74.3 billion in coco levy funds that the high court earlier declared as public funds.
Thus in July 2015, the Privatization and Management Office (PMO) announced that it “temporarily suspended” the planned sale of the government’s controlling stake in UCPB.
The PMO had been in the process of disposing the government’s UCPB stake, targeted to be concluded in September 2015, through a privatization scheme that will require the winning bidder to not only acquire the government equity but also infuse fresh capital into the bank.
The DOF-attached agency that disposes of public assets had required recapitalizing UCPB by at least P15 billion through subscription to up to 37.2 billion primary common shares, as well as called for the outright purchase of at least 1.106 billion common shares held by the government or 73.9 percent of the bank.
The floor price had been set at P1 per share, hence entailing a total investment of at least P16.1 billion.
The PMO had received 12 letters of intent from local and foreign banks as well as private equity firms eyeing to buy UCPB. /je
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