UCPB sets more auctions for P3-B in bad assets

After generating over P170 million from the sale of its foreclosed assets, the United Coconut Planters Bank (UCPB) is holding another auction to complete its plan to rid itself of some P3 billion worth of bad assets.

UCPB is sitting on about P22 billion worth of real or property owned or acquired (ROPOA) assets, but officials said the market response to the sale of its bad assets has encouraged management to hold at least two more auctions this year.

In a separate undertaking, the UCPB is still negotiating for the sale of an entire portfolio of bad assets and bad loans under the Special Purpose Vehicle Act.

According to UCPB president Jose Querubin, the bank had decided to proceed with the sale of individual ROPOAs worth up to P3 billion in order to pare down the bank’s total bad loans and bad assets.

"Retail sale might not be as spectacular as the SPVA sale but market response has been great," Querubin said. "We were able to sell about P170 million worth of both residential and commercial properties."

Querubin said UCPB has tentatively scheduled another auction within the next two months during which another batch of ROPOAs will go on the block.

At the same time, Querubin said UCPB is still assessing its SPVA portfolio and appraisal is being conducted by its adviser, PricewaterhouseCooper.

"We will know by June what the price range will be," Querubin said. "We have no indication yet right now but, off course, there will be a haircut. A lot of these properties came to our books when real estate was higher. Obviously the industry is way down now."

"We’ve begun sounding out to investors that there is a SPVA deal in the works and, hopefully, we will have something to present to the board for approval," Querubin said. "If the price range is acceptable, we will tell our advisers to proceed with the transaction."

However, Querubin said UCPB is struggling to meet the deadline for setting up the asset management company that would take over the bank’s bad loans once these are sold.

Under the law, banks have until September to set up the special purpose vehicles and until the end of the year to sell their bad assets and bad loans in order to qualify for incentives.