PNB transfers P46.7 billion prime real estate to subsidiary

MANILA, Philippines — Tobacco and airline magnate Lucio Tan is consolidating P46.7 billion worth of prime real estate properties in the wholly owned holding firm of Philippine National Bank (PNB) to strengthen its financial position amid the COVID-19 pandemic.

In a disclosure to the Philippine Stock Exchange (PSE), PNB said it is subscribing to an additional 466.77 million shares of PNB Holdings Corp. (PHC), with a par value of P100 per share, in exchange for certain real estate properties of the bank.

“The bank will subscribe to an additional 466.77 million shares of PHC at a subscription price of P100 per share, or a total consideration of P46.67 billion in exchange for certain real estate properties of the bank,” it said.

The additional subscription to 466.77 million shares of PHC will be issued from an increase in authorized capital stock, subject to the approval of the Securities and Exchange Commission (SEC).

“The subscription forms part of a series of transactions which will be undertaken to realize the market value of the bank’s prime properties and reduce low-earning assets to strengthen the bank’s financial position,” PNB stated in the disclosure.

Last Sept. 10, the bank’s board of directors approved a plan to realize the market value of its prime properties and reduce its low-earning assets to strengthen its financial position.

PNB president and chief executive officer Jose Arnulfo Veloso earlier said the objective of the project is to enable the bank to realize the value of the prime properties in the most efficient way.

“This is part of the bank’s long-standing strategy to reduce its low earning assets, improve earnings and strengthen its capital position,” Veloso said.

PHC is a wholly owned subsidiary of PNB established in 1920 as Philippine Exchange Co. Inc. It was converted into a holding company in 1991 and was used by the bank as a vehicle to engage in the insurance business.

The bank is undertaking an inventory of its prime properties, including the 10-hectare PNB Financial Center along Macapagal Boulevard in Pasay City, office buildings in the central business district in Makati City, as well as the foreclosed eight hectare property from the Jacinto Group.

The Tan-led bank announced in 2018 that it was planning to put up a state-of-the-art and world-class 60-story building that would serve as the bank’s new headquarters.