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PMO to dispose of more properties in Q4

/ 12:27 AM September 28, 2015

THE PRIVATIZATION and Management Office (PMO) plans to dispose of more properties in the fourth quarter, including the 13,000-square-meter Luzon Aggregates Inc.’s property in Parañaque City.

Chief Privatization Officer Toni Angeli V. Coo told the Inquirer last week that the PMO would publish by October the list of properties to be privatized in the final quarter of this year.

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The PMO will also endorse at this week’s Privatization Council meeting the sale of Luzon Aggregates’ two contiguous lots to a potential buyer, whose negotiated offer was on par with the P268-million floor price set during the second bid attempt in May, Coo said.

Of the six properties bid out in the first quarter, only the 25,044-square-meter Repacom property in Bulacan was sold. The purchase price was set at P15.7 million.

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The PMO also planned to sell in the third quarter the government’s controlling stake in United Coconut Planters Bank (UCPB) but was “temporarily suspended.”

In June, the Supreme Court issued a halt order on the implementation of two executive fiats signed by President Aquino last March. Executive Order (EO) Nos. 179 and 180 would set into motion the privatization of about P74.3 billion in coco levy funds that the high court earlier declared as public funds.

Coo said the PMO is “hoping that the Supreme Court will lift the TRO soon since they [already have a] latest ruling basically affirming the position that coco levy assets are public funds.”

In a decision last August, the Supreme Court unanimously dismissed claims of UCPB and Coconut Planters Life Assurance Corp. to a block of shares in San Miguel Corp. (SMC). The shares were declared state assets, having been purchased using tax funds from farmers during the regime of the late dictator Ferdinand Marcos.

“The effect of these rulings confirms that the actions of the executive to consolidate these assets for the use of programs and plans to develop the industry are on the right track. But of course, we allow the process to take its course,” Coo added.

Coo had said that “in the event that the TRO is lifted, the PMO expects to promptly resume the bidding activities.”

The stalled privatization of UCPB’s government shares was in compliance with a request from the Governance Commission for Government-Owned or -Controlled Corporations (GCG) to respect the high court’s halt order. GCG is a respondent in the case.

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Prior to the high court order, the PMO was already in the process of disposing the government’s UCPB stake through a privatization scheme that will require the winning bidder to not only acquire the government equity but also to infuse fresh capital into the bank.

The planned transaction required recapitalizing UCPB by at least P15 billion by subscribing to 37.2 billion primary common shares.

The plan had also called 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 had been set at P1 per share, which means the entire deal entailed a total investment of at least P16.1 billion.

The PMO had received 12 letters of intent from local and foreign banks as well as private equity firms eyeing to buy UCPB, the country’s 12th biggest bank, with about P260 billion in assets and over 200 branches.

The P60.1 billion in coco levy funds remitted to the national coffers last May helped the government exceed its P2-billion privatization goal for the year.

The Bureau of the Treasury earlier explained the coco levy funds were remitted by the Presidential Commission on Good Government (PCGG) following the effectivity of EO No. 180.

“The funds are the proceeds from the sale of the SMC series 1 preferred shares and interest income since these were transferred to the Treasury in 2012 and were held in escrow,” it had said.

The latest Department of Finance data showed that as of end-July, privatization proceeds reached P62.7 billion. The bulk, or P62.6 billion, came from the PCGG, while P78 million came from PMO.

Last year, privatization proceeds amounted to only P1.946 billion, a little short of the P2-billion annual target of the Aquino administration. Ben O. de Vera

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