UCPB readies sale of P15-B idle assets
November 30, 2003 | 12:00am
United Coconut Planters Bank is eyeing a further reduction of its non-performing assets via the wholesale auction of P12 billion to P15 billion of its real and other properties owned or acquire (ROPOA) within the next six or seven months. The bank had earlier sold at face value P8 billion of non-performing loans to the Philippine Deposit Insurance Corp. (PDIC).
"The sale could be done under the Special Purpose Vehicle Law or some other structured wholesale transaction or maybe a combination of both," UCPB executive vice president and chief credit officer Higinio O. Macadaeg said, adding that the bank is now looking for a financial advisor to help it craft selling strategies for the ROPOA.
"We have talked to three so far: Ernst & Young Philippines, Inc. PricewaterhouseCoopers Financial Advisors and KPMG Laya Mananghaya & Co., and our preliminary discussion had been very positive" he said. "By the end of this month, we should be able to finalize the terms of reference on which they would base their proposals," Macadaeg said.
ROPOA are hard assets used as collateral to secure loans that bank subsequently foreclosed on or acquired via dacion en pago or payment in kind when the borrowers were unable to pay their obligations.
Macadaeg said the sale of P12 billion to P15 billion of ROPOA would slash UCPBs level of acquired assets by as much as 75 percent, thus removing a big drag on the banks balance sheet and generating funds for the acquisition of new earning assets. He said UCPB has been building up its fund base in preparation for a strong foray into the consumer and middle markets next year.
"Disposing these ROPOA would insulate the bank from the downside of any further weakening of the property market. But certainly, we would want a deal where we would still be able to benefit from a market upturn," Macadaeg stressed.
UCPBs ROPOA are mainly prime real estate in the National Capital Region, which would account for the keen interest in their upcoming auction.
"This early, we have been receiving a lot of serious inquiries from potential investors. Both foreign and local. In fact, the Asian Development Bank and the International Finance Corp. have approached us with firm offers to structure the financing for the investors," Macadaeg said.
The balance of UCPBs ROPOA will be sold piecemeal or managed for a profit by the banks Asset Management Group. The group has a good track record of mining the banks inventory of ROPOA and transforming select idle assets into revenue-earners either by leasing them to a third party or running them as a business.
Macadaeg said the planned wholesale auction of ROPOA represents the banks new thrust to fasttrack the disposal of idle assets.
"We carefully weighed all our options and decided that well come out ahead if we dispose of the assets now rather than wait for the property market to turn around," he said.
"The sale could be done under the Special Purpose Vehicle Law or some other structured wholesale transaction or maybe a combination of both," UCPB executive vice president and chief credit officer Higinio O. Macadaeg said, adding that the bank is now looking for a financial advisor to help it craft selling strategies for the ROPOA.
"We have talked to three so far: Ernst & Young Philippines, Inc. PricewaterhouseCoopers Financial Advisors and KPMG Laya Mananghaya & Co., and our preliminary discussion had been very positive" he said. "By the end of this month, we should be able to finalize the terms of reference on which they would base their proposals," Macadaeg said.
ROPOA are hard assets used as collateral to secure loans that bank subsequently foreclosed on or acquired via dacion en pago or payment in kind when the borrowers were unable to pay their obligations.
Macadaeg said the sale of P12 billion to P15 billion of ROPOA would slash UCPBs level of acquired assets by as much as 75 percent, thus removing a big drag on the banks balance sheet and generating funds for the acquisition of new earning assets. He said UCPB has been building up its fund base in preparation for a strong foray into the consumer and middle markets next year.
"Disposing these ROPOA would insulate the bank from the downside of any further weakening of the property market. But certainly, we would want a deal where we would still be able to benefit from a market upturn," Macadaeg stressed.
UCPBs ROPOA are mainly prime real estate in the National Capital Region, which would account for the keen interest in their upcoming auction.
"This early, we have been receiving a lot of serious inquiries from potential investors. Both foreign and local. In fact, the Asian Development Bank and the International Finance Corp. have approached us with firm offers to structure the financing for the investors," Macadaeg said.
The balance of UCPBs ROPOA will be sold piecemeal or managed for a profit by the banks Asset Management Group. The group has a good track record of mining the banks inventory of ROPOA and transforming select idle assets into revenue-earners either by leasing them to a third party or running them as a business.
Macadaeg said the planned wholesale auction of ROPOA represents the banks new thrust to fasttrack the disposal of idle assets.
"We carefully weighed all our options and decided that well come out ahead if we dispose of the assets now rather than wait for the property market to turn around," he said.
BrandSpace Articles
<
>
- Latest
- Trending
Trending
Latest
Trending
Latest
Recommended