Gov’t ‘temporarily suspends’ UCPB stake sale

The Privatization and Management Office (PMO) announced on Wednesday that it “temporarily suspended” activities leading to the planned sale of the government’s controlling stake in United Coconut Planters Bank or UCPB.

“PMO has temporarily suspended bidding activities regarding the sale of equity in UCPB, in compliance with the request of GCG [Governance Commission for Government-Owned or -Controlled Corporations], which we received [on Tuesday], July 7,” Chief Privatization Officer Toni Angeli V. Coo said in a text message.

Last week, the Supreme Court issued a temporary restraining order (TRO) putting on hold the implementation of Executive Order (EO) Nos. 179 and EO 180 signed by President Aquino in March, which would 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.

“We remain confident in the validity of EOs 179 and 180 and in the speedy resolution of the case,” Coo said.

According to Coo, “[i]n the event that the TRO is lifted, PMO expects to promptly resume the bidding activities.”

The TRO was issued in favor of petitioning group Confederation of Coconut Farmers Organizations of the Philippines, which accused President Aquino of committing grave abuse of authority when he issued the two EOs without the approval of Congress and the Sandiganbayan.

The PMO had nonetheless pointed out that the sale of the government’s UCPB stake is being facilitated not only by EO 179, but also by earlier approvals made by the Bangko Sentral ng Pilipinas for the bank’s recapitalization as early as 2008, the Governance Commission for Government-Owned or -Controlled Corporations, as well as the Supreme Court’s entry of judgment on the case involving San Miguel Corp. shares granted last December.

Last June 17, the PMO 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 over 200 branches and about P260 billion in assets.

The government was in the process of disposing its UCPB stake targeted to be concluded on Sept. 24, through a privatization scheme that will require the winning bidder to acquire the government’s equity in it 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 total investment of at least P16.1 billion.