The government is pushing through with the sale of its majority share in United Coconut Planters Bank (UCPB) after the Supreme Court lifted the temporary restraining order issued two years ago against the implementation of a presidential directive allowing the disbursement of coco levy funds.
Finance Secretary Carlos G. Dominguez III told a forum last week that the government would soon privatize UCPB, which he said the government was currently supporting with deposits in excess of P40 billion.
The Supreme Court this month lifted the TRO it had issued to implement EO 180 signed by former President Benigno Aquino III.
The Supreme Court in June 2015 put on hold the implementation of EOs 179 and 180, which would have set into motion the privatization and reconveyance to the government of about P74.3 billion in coco levy funds that the high court earlier declared as public funds.
Thus in July 2015, the Privatization and Management Office (PMO) announced that it “temporarily suspended” the planned sale of the government’s controlling stake in UCPB.
The PMO had been in the process of disposing the government’s UCPB stake, targeted to be concluded in September 2015, through a privatization scheme that would require the winning bidder to not only acquire the government equity but also infuse fresh capital into the bank.
The Department of Finance-attached agency that disposes of public assets had required recapitalizing UCPB by at least P15 billion through subscription to up to 37.2 billion primary common shares and called for the outright purchase of at least 1.11 billion common shares held by the government or 73.9 percent of the bank.
The floor price had been set at P1 a share, hence entailing a total investment of at least P16.1 billion.
The PMO received 12 letters of intent from local and foreign banks as well as private equity firms looking to buy UCPB.
Also, Dominguez said UCPB’s capital program was expiring on Dec. 31 next year and the government was not inclined to have it extended, hence it would privatize the bank instead.