GSIS attempts to sell thrift bank stake anew

FOR THE third time, state-run pension fund Government Service Insurance System will try to dispose of its majority stake in GSIS Family Bank through a negotiated sale.

In an advisory over the weekend, GSIS investment bids and awards committee (Ibac) chair Severina L. Resurreccion said they will accept financial offers as well as the corresponding documentary requirements until Oct. 5.

Just like the two previous occasions when GSIS tried to sell its 99.5-percent share in the thrift bank formerly known as Comsavings Bank, the negotiated sale will involve 25,150,006 common shares, 48,758 preferred “A” shares, and 1.25 million preferred “C” shares.

The negotiated sale remains subject to the condition that the remaining 0.5 percent of GSIS Family Bank belonging to private stockholders, represented by the heirs of former Cavite Rep. Renato P. Dragon, will also be sold to the same buyer through a separate transaction.

Last Sept. 4, Resurreccion said the Ibac had declared a failure the negotiated sale of the GSIS’s shares to Phindep Development Corp.

GSIS president and general manager Robert G. Vergara earlier said they had been seeking the Bangko Sentral ng Pilipinas’ approval for the sale. Vergara has yet to respond to the Inquirer’s query about the failed transaction.

In July, the state pension fund accepted Phindep’s P502-million offer—higher than the P501-million floor price—to buy the bank’s controlling share. The latter was the lone entity that submitted the required consent letter from the Dragon family.

Securities and Exchange Commission (SEC) documents subsequently showed Phindep, a real estate firm, is based in Kawit, Cavite—the province where the late Dragon had served as representative. The company was registered with the SEC just last Mar. 27, with an authorized capital stock of only P1 million.

A series of failed biddings in recent years prompted the GSIS to try selling its stake in the thrift bank through a negotiated sale.

In June, Altus Capital Partners, which on its website claims to be “a Southeast Asian-based investment banking and asset management firm focused on distressed debt and special situations advisory, investment and management,” offered to buy the GSIS stake for P501 million.

However, the Ibac later announced the documents submitted by Altus were “incomplete,” hence, “no party satisfied the requirements” during the first time that the pension fund tried to dispose of its stake via a negotiated sale.

The GSIS is offering an incentives package to potential buyers under Monetary Board Resolution No. 224, which allows the new owner to open 20 additional branches and relocate 12 of GSIS Family Bank’s existing 22 branches anywhere in the Philippines.

The new owner may also continue the bank’s authority to accept government deposits from the GSIS; retain GSIS Family Bank’s thrift banking license if it is a commercial bank; merge with GSIS Family Bank if it is a thrift bank, and with the option to convert itself into a commercial bank; and convert GSIS Family Bank into a commercial bank.

The Development Bank of the Philippines pegged the end-2014 value of GSIS Family Bank at P520-670 million, Vergara earlier said.

The GSIS executive had said middle-tier players expressed interest in the bank when it was auctioned off in 2011. Since the banking sector has already been liberalized, foreign entities as well as nonbanks may buy GSIS Family Bank.