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12 banks, private equity firms express interest to buy gov’t stake in UCPB

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12 banks, private equity firms express interest to buy gov’t stake in UCPB

By: - Reporter / @bendeveraINQ
/ 08:56 AM June 18, 2015

Twelve banks and other financial institutions have expressed interest to purchase the government’s majority stake in United Coconut Planters Bank (UCPB).

In a text message on Wednesday night, Chief Privatization Officer Toni Angeli V. Coo said the Privatization and Management Office (PMO) “received 12 letters of intent, from a mix of local and foreign entities, banks and private equity firms” as of Wednesday’s 5 p.m. deadline of submission of letters of intent among interested bidders.

But Coo clarified that the 12 entities “are not considered prospective bidders until they submit their pre-qualification documents on June 30.”

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Coo did not identify the said banks and private equity companies, citing that “some are listed companies, so they may need to complete their own internal process in order to finalize their own disclosures, and their decision whether to bid.”

The PMO chief said the prospective bidders would be identified only after they have hurdled pre-qualification.

The government plans to dispose its majority stake while also injecting fresh capital into UCPB in September through a sale of equity, under which a minimum bid of P16.1 billion shall be required from interested buyers.

READ: Gov’t to sell UCPB stake by September | UCPB vows transparent bidding process

The PMO early this month announced that the equity sale transaction will involve a minimum recapitalization amount of P15 billion in cash by subscribing to up to P37.2-billion primary common shares of UCPB, on top of purchasing at least 1,106,408,800 common shares held by the government equivalent to at least 73.9 percent of the universal bank. Both have a minimum share price of P1 per share.

According to the PMO, the financial bid of qualified bidders must indicate the following: the cash amount of its subscription to primary common shares of UCPB, which must not be less than the minimum recapitalization amount; the share price at which it shall subscribe to primary common shares of UCPB, which must not be less than the minimum share price; and the cash amount that it shall pay for the government shares (an amount equal to the number of government shares multiplied by the share price).

The PMO shall determine the highest financial bid or total investment amount—the sum of the amounts intended for recapitalization and purchase of government shares, whose subscription to primary common shares of UCPB will then be subjected to the pre-emptive rights of stockholders.

“The bidder with the highest financial bid shall likewise be required to make an offer to acquire the common shares of UCPB owned by the pre-transaction stockholders,” according to the PMO.

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Prospective bidders shall undergo prequalification, and should have submitted to the bids and awards committee (BAC) between June 2 and 17 a letter of intent as well as a confidentiality agreement on top of paying a non-refundable participation fee of P100,000. The deadline for submission of prequalification requirements under the asset specific bidding rules for prospective bidders is on June 30.

Prequalified bidders would have to again shell out P1 million in bid fee by July 10, after which all qualification requirements must be submitted to the BAC on August 27.

The submission and subsequent opening of bids are scheduled at the PMO office on September 18.

The sale of the government’s controlling stake in UCPB has been facilitated by Executive Order No. 179 issued by President Benigno Aquino III last March, alongside an earlier approval made by the Governance Commission for government-owned and –controlled corporations as well as the Supreme Court’s entry of judgment on the case involving San Miguel Corp. shares granted last December.

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TAGS: auction, banks, bidding, government stakes, stake, UCPB, United Coconut Planters Bank
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