Banks, private equity firms eye stake in UCPB

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 sent Wednesday night, Chief Privatization Officer Toni Angeli V. Coo said the Privatization and Management Office (PMO) had 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 for submission of letters.

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

According to industry sources, among the banks that submitted letters of intent were BDO Unibank Inc., Bank of the Philippine Islands, Philippine National Bank, Rizal Commercial Banking Corp. and Robinsons Bank Corp., as well as at least four foreign entities from Japan, Malaysia and Taiwan. According to previous reports, China Banking Corp., East West Banking Corp., Security Bank Corp. and Union Bank of the Philippines had also indicated interest to participate in the bidding.

The government is in the process of disposing its UCPB stake seen concluded by September, through a privatization scheme that will require the winning bidder to acquire the government’s equity and infuse fresh capital into the bank.

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 a total investment of at least P16.1 billion.