MANILA, Philippines—Local banking giant Metropolitan Bank and Trust Co. is selling its 30-percent stake in Toyota Motor Philippines to parent conglomerate GT Capital Holdings for P9 billion.
The move will allow Metrobank to focus on its core banking businesses.
The transaction will jack up GT Capital’s direct equity in TMP to 51 percent from 21 percent. This is in line with the consolidation of the businesses under the group of taipan George Ty into the holding company while taking a non-allied business off the books of Metrobank.
“The acquisition of more shares in TMP is part of GT Capital’s long-term program of increasing its holdings in its core businesses,” GT Capital disclosed to the Philippine Stock Exchange earlier.
“For Metrobank, the transaction will serve to strengthen its balance sheet and capital position in preparation for the implementation of Basel III,” the disclosure added.
Basel III introduces a complex package of reforms designed to improve the ability of banks to absorb losses, extend the coverage of financial risks and have a stronger firewall against periods of stress.
Metrobank and GT Capital have signed a memorandum of understanding to undertake this transaction, the two listed companies have disclosed to the Philippine Stock Exchange.
The disclosure added that the P9-billion deal was arrived at after an independent valuation, which was subjected to third party fairness opinions, it said.
GT Capital jacked up its first-half net profit by 136 percent year on year to P4 billion as one-time gains booked by property unit Federal Land Inc. added to a double-digit expansion in core earnings.
The other member-companies of GT Capital are Federal Land, Global Business Power and Philippine AXA Life Insurance Corp. However, only Federal Land and Global Power are fully consolidated into GT Capital while TMP, Metrobank and AXA are carried through equity accounting. After this transaction, TMP can be fully consolidated into GT Capital.
In the first half of the year, TMP posted a 35-percent year-on-year increase in net income to P1.5 billion.