The Philippine Deposit Insurance Corporation (PDIC) announced that preparations for the bidding to rehabilitate the closed Export and Industry Bank (EIB) are proceeding smoothly. It disclosed that the bidding for the bank’s rehabilitation is scheduled on October 18, 2012, at the PDIC Office in Ayala Avenue, Makati City.

PDIC launched the rehabilitation process after strategic third party investors (STPIs) expressed interest to rehabilitate EIB. The PDIC said that STPIs who have been pre-qualified to participate in the bidding may bid on the first tranche covering the purchase of EIB’s assets (including its branches) and assumption of liabilities. The second tranche of the bidding will be for EIB’s commercial bank license. The two-tranche bidding process is intended to maximize recovery for the benefit of the bank’s creditors. The bidding process for the second tranche will commence in the next two weeks.

The PDIC Board has approved the general framework for the bidding process to ensure transparency and attract the best bid from qualified STPIs. The Bidding Procedures for the first tranche are now being finalized and will be released next week through the PDIC website, www.pdic.gov.ph.

PDIC President Valentin A. Araneta said that PDIC continues to address the concerns of both pre-qualified STPIs and depositors to ensure a successful bidding.

According to PDIC, there are certain critical requirements for the rehabilitation of EIB. These are: (1) support from the STPIs that will bid for the rehabilitation of EIB; 2) consent of majority of stockholders; (3) consent of all creditors and uninsured depositors; and 4) successful bidding.

Interested parties have been pre-qualified based on their financial and management capability. Pre-qualified STPIs have completed due diligence audit on EIB and are now making preparations for the bidding. PDIC disclosed that there is a sufficient number of STPIs to proceed with the bidding. Pre-qualified STPIs have to submit a rehabilitation plan that complies with the requirements for capital strengthening, liquidity, sustainability and viability; and governance.

EIB stockholders have also manifested support for the rehabilitation. The PDIC said that it is discussing with the bank’s stockholders the documents to be executed by the stockholders.

PDIC also conducted meetings with EIB’s uninsured depositors to discuss the status of EIB, the prospects and requirements for the bank’s rehabilitation, in particular, their consent for the rehabilitation and possible restructuring of their deposits. To date, 35% of the depositors have already submitted the required consent, while others have signified that they will submit their consent as soon as possible.

PDIC earlier targeted the bidding to be conducted in the second half of September 2012, but decided to give creditors and uninsured depositors more time to submit their consents. While depositors have expressed support for the rehabilitation of EIB, delays in the receipt of consents have been experienced due to depositors’ individual circumstances. Around 15% of depositors could not be reached because of incomplete and outdated addresses and contact details in the bank’s records.

PDIC announced that it will continue to receive consents, and depositors may submit their consents to the Records Control and Logistics Department, 4/F SSS Building, 6782 Ayala Avenue cor. V.A. Rufino St., Makati City (Attention: Assistant Vice President Teresa H. Garcia). For more information, interested parties may call telephone no. (02) 841–4725 or e-mail rbmg@pdic.gov.ph.

The Philippine Deposit Insurance Corporation (PDIC) was established on June 22, 1963 by Republic Act 3591 to provide depositor protection and help maintain stability in the financial system by providing permanent and continuing deposit insurance. Effective June 1, 2009, the maximum deposit insurance coverage is P500,000. All deposit accounts by a depositor in a closed bank maintained in the same right and capacity shall be added together. A joint account shall be insured separately from any individually-owned deposit account.

PDIC news/press releases and other information are available at the website, www.pdic.gov.ph.

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