Separate auctions set for EIB assets, license

MANILA, Philippines - The assets and banking license of the shuttered Export and Industry Bank (EIB) will be auctioned off by the government separately to interested parties beginning next month, a statement said yesterday.

 “The Philippine Deposit Insurance Corp. (PDIC) announced that preparations for the bidding to rehabilitate the closed EIB are proceeding smoothly,” the state deposit insurer said.

 “The PDIC Board has approved the general framework for the bidding process to ensure transparency and attract the best bid from qualified STPIs (strategic third party investors),” it added.

Two biddings will be held: one will be for EIB’s assets and liabilities, including the bank’s branches and another for EIB’s commercial bank license, the statement said. Bidding procedures for the first portion will be released next week with actual public auction slated for Oct. 18 at the PDIC’s office in Makati.

For the second part, pre-qualification to bid will be opened “in the next two weeks” with actual bidding yet to be scheduled, said Jun Villaret, officer-in-charge of the corporate affairs office.

 “There will be two tranches for bidding to maximize recoveries for creditors and provide flexibility to bidders,” he said in a text message, without elaborating.

PDIC initially targeted to bid out EIB’s rehabilitation this week, but it did not push through after the agency “decided to give creditors and uninsured depositors more time to submit their consents.”

PDIC took over EIB last April 27 after the Bangko Sentral ng Pilipinas (BSP) placed it under receivership due to liquidity problems. The bank’s management had admitted it could no longer service its obligations to its depositors.

A bank’s rehabilitation, which will also require BSP approval, will include another lender managing EIB’s finances and paying its large obligations, enough to ensure that after the program the bank could function again properly.

 “Pre-qualified STPIs have to submit a rehabilitation plan that complies with the requirements for capital strengthening, liquidity, sustainability and viability and governance,” PDIC said.

It declined to name the banks that have been pre-qualified to bid for the first tranche, but in the past Sy-led BDO Unibank Inc. and Rizal Commercial Banking Corp. have signified interests to EIB.

As of its closure last April, data showed EIB has a total of 46,134 depositors holding some P14 billion worth of deposits. Payment of depositor claims had been ongoing and PDIC said that as of last week, it had already serviced 34,226 depositors, equivalent to 94.7 percent of the 36,153 who submitted claims to its office.