Gov’t to bid out UCPB stake in September

The government plans to dispose of its majority stake in United Coconut Planters Bank (UCPB) in September through a privatization scheme that will require the winning bidder to acquire the government’s equity in it and infuse fresh capital into the bank.

In a notice published yesterday, the Privatization and Management Office (PMO) said the transaction would require the winning bidder to recapitalize the bank in the amount of at least P15 billion through subscription to up to 37.2 billion primary common shares of UCPB.

It also calls 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 was set at P1 per share which means the entire deal would require total investment of at least P16.1 billion.

According to the PMO, the financial bid of 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 will subscribe to primary common shares of UCPB, which must not be less than the minimum share price, and the cash amount that it will pay for the government shares (or equal to the number of government shares multiplied by the share price).

The PMO will determine the winning bidder based on the financial bid or total investment amount—the sum of the amounts intended for recapitalization and purchase of government shares. Subscription to primary common shares of UCPB will, however, be subject to the pre-emptive rights of stockholders.

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

Prospective bidders will undergo pre-qualification and must submit to the bids and awards committee (BAC) between June 2 and 17 a letter of intent and a confidentiality agreement. They will also be required to pay a non-refundable participation fee of P100,000.

The deadline for submission of pre-qualification requirements under the asset specific bidding rules is on June 30.

Pre-qualified bidders will have to shell out another P1 million in bid fee by July 10 and submit all qualification requirements to the BAC on Aug. 27.

The submission and subsequent opening of bids will be done at the PMO office on Sept. 18.

The sale of the government stake in UCPB, which were previously under sequestration,  was provided for under Executive Order No. 179 issued by President Aquino last March.