BSP revises rule to allow restructuring of Uniwide debts

The Bangko Sentral ng Pilipinas (BSP) has revised a major regulation governing the allied undertaking of commercial banks to be able to allow the full restructuring of Uniwide with its creditor banks.

Sources said the BSP revision is necessary so that even the exposure of commercial banks to Uniwide could be included in the restructuring agreement.

Under the proposed restructuring, a special purpose vehicle (SPV) will be created by the Uniwide receiver which will be owned by the creditors of Uniwide.

However, while the universal bank creditors of Uniwide have no problem in investing in the SPV, which is envisioned to be a leasing company, ordinary commercial banks face some restriction regarding their allowed allied undertakings.

To get around that problem, the BSP has agreed to revise the existing regulation on the allowed undertaking of banks to expand the coverage of leasing companies.

Thus, banks may invest in equities of leasing companies "including leasing of stalls and spaces in a commercial establishment provided, that bank investment in acquisition of shares of such leasing company shall be limited applicable only in cases of conversion of outstanding loan obligation into equity."

Thus, under the proposed restructuring agreement, Uniwide creditors will invest in the SPV by converting their outstanding loan into equity into the SPV.

The restructuring of Uniwide’s P11.1 billion debt, in turn, will pave the way for the entry of the French retail group Casino into Uniwide.

The Casino Group has vowed that with its entry into Uniwide, it would be able to immediately bring in $100 million into the country. – Marianne Go