Finance Secretary Jose Isidro Camacho said both camps expect to sign the MOA anytime next week except Monday.
The widely-anticipated signing of the MOA completes several months of negotiations between the group of Tan which currently has a 67-percent stake in PNB and government which controls about 17 percent.
Previously, the Department of Justice (DOJ) gave government the go ahead to carry out the so-called reverse privatization of PNB.
Justice Secretary Hernando B. Perez said in a legal opinion that the government could legally get PNB convertible bonds by way of debt-to-equity conversion. However, it prohibited the state-run Philippine Deposit Insurance Corp. (PDIC) from acquiring voting shares in the bank.
The DOJ also said the DOJ can sell government’s stake with Tan’s group but this will be subject to right of first offer and right to match in favor of Tan.
Perez said however, there is nothing illegal with the conversion of these preferred shares to voting stocks if this is done by agencies other than PDIC.
With the loan-to-equity conversion, the government will increase its stake to 44.98 from the current 16.58 percent, while Tan’s shareholdings will get diluted to 44.98 percent, from 68 percent.
The government earlier sought the DOJ opinion to ensure the MOA it will sign with Tan’s group is "legally enforceable."
The DOJ opinion cleared a possible legal issue on conflict of interest since PDIC is a banking industry regulator. Specifically, government asked the DOJ if it is legal for PDIC to enter into a debt-to-equity scheme to partially settle PNB’s obligations with PDIC.
The PDIC has a P10-billion loan exposure to PNB, a portion of which, together with the Bangko Sentral ng Pilipinas’ P15-billion exposure, could be converted into equity as part of the rehabilitation plan. – Rocel Felix