BDO says Exportbank buy deal still uncertain
Tycoon Henry Sy’s Banco de Oro Unibank (BDO) remains in talks to acquire some assets and liabilities of medium-sized Export and Industry Bank (Exportbank), but the possibility of successfully reaching a deal still appears to be remote.
“There’s no progress. Nothing at all. Parang malabo na [It doesn’t seem likely],” BDO chairperson Teresita Sy-Coson said Friday.
But BDO, the country’s largest bank, is not yet closing its doors on Exportbank even if the negotiations are “taking so long.”
“We’re still looking at the positive side,” Sy-Coson said in an interview shortly before BDO’s annual stockholders’ meeting. “But I think there’s nothing much happening and it [negotiations] is taking too long.”
Exportbank, which had total resources of P44 billion as of the last quarter of 2009, had said it was looking to sell some of its assets and liabilities. A deal with BDO may involve its 50-branch network, which held total deposits of around P19 billion at the end of last year.
BDO president Nestor Tan, in a media briefing Friday before the stockholders’ meeting, explained the negotiations were “not as easy as a buyer-seller agreement.”
Tan said nothing has been finalized “because we need to make sure we sort out all the regulatory issues.”
If BDO agrees to acquire some of Exportbank’s assets and liabilities, it will also have to absorb the P9-billion loan the latter obtained from PDIC in 2005, according to the state deposit insurer.
“We’re still discussing. Will [the asset sale] push through? Honestly, I don’t know,” Tan said.
Early this month, Exportbank said it was preparing to sell its share in three affiliates after booking a P71.2-million gain from the recent disposal of its 1.5 million shares in Cebu-based unit EIB Savings Bank Inc.
The listed commercial bank will sell its shares in EIB Forex Corp., EIB Insurance Brokers Inc., and Urbancorp Insurance Brokers Inc. It has also disclosed its decision to liquidate four units, such as Valuegen Financial Insurance Co. Inc., Banclife Insurance Co. Inc., Urbancorp Realty Holdings Inc., and Value Finance Inc.
According to Exportbank president Juan Victor Tanjuatco, the sale of EIB Savings was “just one of the things we have to do preparatory to management’s overall strategic plan for Exportbank.”
Exportbank is seen getting rid of assets that may not be included in an asset-sale deal with BDO.
It had sold EIB Savings to venture capitalists Project Quest Corp., Fleetwood Holdings Inc., Navion Capital Resources Corp., and Santos Gonzalez Hijos Inc. The unit had total assets of P67.7 million and deposit liabilities of P2.5 million as of September 2009.
Exportbank has not submitted any financial reports to the stock exchange over the last two years and trading of its shares has been suspended for about a year now.
In a May 17 letter to the Philippine Stock Exchange, the bank said it was still awaiting approval from regulators “to finalize our agreement with our investors.”
“Management intends to incorporate [the approved deal] in the bank’s reportorial requirements, which include its quarterly report for the period ending March 31, 2010, so that the public and other interested parties can fully understand the transaction,” it said.
Exportbank is 37-percent owned by the Hong Kong-based Lippo Group. Other major shareholders are AO Capital Partners Group with 22 percent, juice maker Zest-O Corp. and Zest Air owner Ambassador Alfredo Yao with 20 percent, and Austria’s RZB Group with 9.5 percent.
After announcing that more assets will be sold, the bank has indefinitely postponed its annual stockholders’ meeting.
Exportbank acquired Urban Bank in 2001 after the former collapsed. Urban Bank declared a bank holiday in 2000 for failing to service heavy-deposit withdrawals and was consequently closed by the BSP and put under the receivership of PDIC.
