Government to sell stake in Subic Shipyard

MANILA, Philippines - The Aquino administration is offering to investors the government’s shares in the Subic Shipyard and Engineering Company, a shipyard managed by Keppel Shipyard Ltd.

In an announcement, the government’s Privatization and Management Office said it is offering for sale through public bidding on an “as is, where is” basis and as one block, the 89,622,929 common shares of the Philippines in Subic Shipyard and Engineering Inc. (SSEI).

“This represents approximately 8.76 percent of the total outstanding capital stock of the company,” the PMO said in its announcement.

Furthermore the shares are being offered at a “base price” of P584.7 million, subject to a Swiss challenge.

Interested investors may get information on the Swiss challenge from offer for sale documents from the PM0.

According to the announcement, interested parties should submit “Expressions of Interest” to the PMO from Jan. 6 to 17, 2011.

Those who submit EOIs can get a copy of the offer for sale documents upon payment of a non-refundable fee of P10,000 and signing of a confidentially agreement which can be obtained from the PMO.

The PMO said that it would be receiving offers on Jan. 18. It reserves the right to reject any or all offers. It also reserves the right to award the sale to the bidder whose offer is most advantageous to the government.

Privatization is among the options the government has in funding its budget deficit.

The government had targeted to raise P2 billion last year from privatization, revised downward from the P30 billion programmed by the previous administration for 2010.

The P30 billion took into account the estimated P10 billion to P13 billion from the 103-hectare Food Terminals Inc. (FTI) agro-industrial property in Taguig but the sale did not materialize because bidders wanted a lower price.

The P2 billion, on the other hand, consisted of small real estate properties and shares of stocks of the government in various companies.

The government is eyeing to contain the budget gap at P290 billion this year and is hoping to have kept last year’s deficit within the P325 budget ceiling.