Lucio Co buying 38% of PBCom for P5.97 billion

Lucio Co. FILE PHOTO

MANILA, Philippines — Retailer Lucio Co has entered the banking business by buying a 37.67 percent stake in Philippine Bank of Communications for P5.97 billion.

PBCom, a commercial bank, told the Philippine Stock Exchange on Wednesday that it had accepted an offer from Co—through his delegated entity Union Equities Inc.— to subscribe to 181.08 million common shares at P33 per share.

“The subscription of the shares will be effective upon the due execution of the subscription agreement and will be subject to the applicable regulatory approvals,” the bank said.

Co is buying into PBCom at a discount to the last closing price of P64 per share on Tuesday. Trading on PBCom was halted on Wednesday following the disclosure on this transaction.

The bank earlier mapped out three options to beef up capital to acquire leeway for expansion under the more stringent Basel 3 capital adequacy ratio (CAR), including raising fresh equity from a private placement of equity.

It was earlier reported that PBCom was also considering to raise as much as P1 billion from the sale of new shares to existing shareholders or up to P2 billion from the sale of subordinated notes qualifying as Tier 2 or supplementary capital under Basel 3.

A mix of these three fund-raising options — stock rights, Tier 2 notes and private placement — is seen to allow PBCom to jack up its Tier 1 CAR based on the Basel 3 framework to at least 15 percent from around 10 percent at present, giving the bank room to expand risk assets.

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