Megaworld, Singapore firm to set up AMC

Premier property developer Megaworld Corp. will tie up with Singapore-based Colony Capital Asia Pacific (CCAP) for a joint venture in the establishment of an asset management company (AMC).

Banking sources said Megaworld is in talks with CCAP, whose expertise is in buying and selling foreclosed assets.

Megaworld has reportedly informed the Bangko Sentral ng Pilipinas (BSP) about its plans and also indicated its willingness to discuss possible partnerships with other banks.

The same sources said Megaworld can provide its expertise in property development while CCAP will handle the sale of a number of the foreclosed properties and other failed property projects of the property developer.

Should the deal push through, it could start a trend in joint ventures between property developers with problematic assets and AMCs for as long as the former is not an affiliate of a bank, the sources said.

Earlier, it was reported that US-based investment house Lehman Brothers and the country’s biggest commercial bank, Metropolitan Bank and Trust Company (Metrobank) were set to sign a memorandum of agreement (MOA) for a joint venture on an AMC. Metrobank will be the first bank to put its bad loans on non-performing loans (NPLs) under an AMC.

Lehman has been conducting its due diligence work, much in the same fashion as another US-based concern known for coming to the aid of distressed or ailing banks and other companies, Cerberus Plc.

Lehman was earlier reported to have pledged to invest $1 billion to a venture dubbed "Philippine Recovery Fund" wherein the US-based company will buy NPLs of Philippine banks at a discount and later, sell the assets to other investors.

The sources said they expect other banks with huge NPLs to follow suit after the Lehman-Metrobank deal is sealed.

Other banks that have earlier expressed interests in putting up AMCs are Equitable PCI Bank, Metropolitan Bank and Trust Co. and Land Bank of the Philippines. – Rocel Felix