Philippine National Bank Privatization Program Approved

Strategic Insights -

The Philippine National Bank (PNB) privatization program, backed by the International Monetary Fund (IMF) and the World Bank (WB), has reached its final stages after the government bidding committee accepted the sole bid of Starbuck Equities Corp. for the remaining 30.39% stake in the bank. The bid, worth P6.267 billion, was submitted by Lucio Tan's firm, which offered to buy 62.67 million PNB shares for P100 each on a deferred basis, with full payment due by July 18, 2002. The IMF and WB have expressed no objection to the privatization deal, which has been criticized by Hongkong-based Templeton Asset Management, Ltd. for potential cronyism and conflict of interest.

Key Takeaways:

  • The Philippine government has accepted the sole bid of P6.267 billion from Starbuck Equities Corp., a firm owned by Lucio Tan, for the remaining 30.39% stake in the Philippine National Bank (PNB).
  • The deal, which was backed by the IMF and WB, will see the bank's remaining shares being bought at P100 each on a deferred basis, with full payment due by July 18, 2002.
  • The government bidding committee approved the sale, despite criticisms from Hongkong-based Templeton Asset Management, Ltd. regarding potential cronyism and conflict of interest.
  • Finance Undersecretary Cornelio Gison clarified that the voting rights can be transferred to the buyer once the balance is paid with a secured letter of credit.
  • Bangko Sentral ng Pilipinas (BSP) Governor Rafael B. Buenaventura assured that the bidding process was cleared with the IMF and WB, and that they have no objection to Lucio Tan's purchase, as long as he is willing to invest more in the bank.

Statistics:

  • The sale price of the remaining 30.39% stake in PNB is P6.267 billion.
  • The number of shares being sold is 62.67 million.
  • The price per share is P100.
  • The initial payment made by Starbuck Equities Corp. was P600 million.
  • The full payment is due by July 18, 2002.
  • Templeton Asset Management, Ltd. owns 12.9% interest in PNB.

Sources:

  • "Government accepts only Lucio Tan's bid for PNB; sets P6.267 billion final price" - BusinessWorld, [no date]
  • "IMF, WB okay PNB sale" - BusinessWorld, [no date]
  • "BSP: Privatization of PNB cleared with IMF, WB" - BusinessWorld, [no date]
  • "Templeton: PNB sale 'bad shape'" - BusinessWorld, [no date]