FOREIGN ASSET MANAGEMENT (AMC) BUYS UCPB'S BAD ASSETS WORTH P13.6 B
MANILA, October 6, 2004 (STAR) By Ted P. Torres - First Sovereign Funds Corp., a foreign asset management company (AMC), has acquired United Coconut Planters Bank’s (UCPB) bad assets worth P13.6 billion.
The deal, when closed, would be the biggest in terms of value. The deal was also a purely ROPOA (real and other properties owned or acquired) package.
The First Sovereign Funds Corp. was established by Pennsylvania Capital Holdings Inc., the Philippine affiliate of investment management firm Shinhan M&A of South Korea.
UCPB president and chief executive officer Jose L. Querubin said the sale will reduce by more than 55 percent the bank’s ROPOA level.
Querubin said the bank’s financial advisor, PricewaterhouseCoopers, legal counsel SyCip Salazar Hernandez & Gatmaitan Law Office, and First Sovereign Funds "are now working out the finer details of the agreement and expect to be able to close the transaction before the April 8, 2005 deadline mandated under the Special Purpose Vehicle (SPV) Act of 2002."
"We should be able to close the agreement with First Sovereign Funds Corp. and get the requisite regulatory approvals very soon, " Querubin said.
UCPB entered into direct negotiations with First Sovereign Funds in late August following two failed public biddings in July 19 and the August 9.
The foreign AMC submitted the highest bid in the August auction but failed to meet the bank’s reserve price.
The SPV Law provides a range of incentives, including tax perks and lower transactions fees to banks unloading their distressed assets through a SPV.
Banks have until April 2005 to avail themselves of the incentives, although a bill was passed recently seeking a two-year extension of the SPV perks. Only SPVs that were registered before September 18 this year can avail of the incentives.
Meanwhile, UCPB plans to do another SPV deal before April next year. It already registered a SPV with the Securities and Exchange Commission (SEC) last month, and this will be used as the vehicle for the succeeding SPV transaction.
Reported by: Sol Jose Vanzi
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