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UCPB sale on hold due to injunction

Posted on July 09, 2015

THE AUCTION of the government’s stake in United Coconut Planters Bank (UCPB) has been suspended after the Supreme Court indefinitely restrained the sale of coco levy assets, the head of the Finance department’s Privatization and Management Office (PMO) said yesterday.

“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 and -controlled corporations) which we received on July 7,” Chief Privatization Officer Toni Angeli V. Coo said in a text message.

Despite the setback, Ms. Coo said the government “remains confident” that the two executive orders (EOs) in question that pave the way for the sale of assets bought with funds from the Marcos-era coco levy are valid.

The Supreme Court on June 30 stopped the implementation of EOs 179 and 180. EO 179 ordered the accounting of coco levy assets -- now officially estimated to be worth P93 billion -- and identifying which ones can be sold, while EO 180 mandated the drafting of a road map to develop the coconut industry.

“In the event that the temporary restraining order is lifted, PMO expects to promptly resume bidding activities,” Ms. Coo said.

The original timetable gave companies that submitted letters of intent to join the bidding until July 16 to submit pre-qualification requirements, while opening of bids has been moved to Sept. 24 from Sept. 18 initially. A total of 12 local and foreign banks and private firms had expressed intent to join the bidding. PMO declined to name them, saying some are listed companies that are bound by disclosure rules.

Officials of BDO Unibank, Inc.; Robinsons Bank and Security Bank Corp. confirmed these banks’ intent to vie for the government’s UCPB stake, while San Miguel Corp. has also disclosed that it will join the auction.

Reuters had reported interest of US private equity firms Lone Star Funds, TPG Capital Management and CAP IV Engagement Ltd. -- an affiliate of Carlyle Asia Partners IV -- as well as of Mitsubishi UFJ Financial Group, Inc.

The sale involves the government’s 73.9% UCPB stake worth at least P1.1 billion and infusion of at least P15 billion in fresh capital. -- Mikhail Franz E. Flores