The Manila Times
Monday, December 7, 1998
By Carmina E. Reyes
Reporter
TAIPAN Lucio Tan is training his sights on the Philippine National Bank (PNB), the country's second largest bank, which the government plans to completely privatize by the year 2000.
Aside from PNB, a source pointed out, there are also other companies, publicly listed or not, which are being eyed by the Tan group.
These include listed firms Manila Electric Co. and Petron Corp.; Philippine Phosphates and Fertilizer Corp. (Philphos), National Steel Corp. and the National Power Corp. (Napocor).
"He's keeping an eye on all companies with government stake. The opportunity is there for him, so why not take it,” the source said.
A source said Tan may have begun weighing the possibilities of buying a strategic stake in PNB with the help of former PNB president Peter Favila, who is currently the president of the Tan-controlled Allied Bank.
But the source said there are a lot of impediments to this deal. “First, there's the feud between Executive Secretary Ronaldo Zamora and PNB Chair Edgardo Angara. But money talks. This is a money game,” the source said.
PNB, formerly the country's largest bank, was dislodged by Metropolitan Trust and Banking Corp. (Metrobank) from the industry's top spot due to its weakening financial condition.
As of November, its non-performing loan ratio has reached 14 percent, the highest level since the regional crisis started in July 1997.
Among the local banks, it has the largest exposure in Philippine Airlines which has filed for debt payment suspension with the Securities and Exchange Commission (SEC). PNB is also heavily exposed to some cash-strapped firms such as Victorias Milling Corp., the Eyco Group of Companies, and RJ Ventures Holdings Inc.
PNB President Benjamin Palma-Gil has already conceded that the bank's net income may fall to only P400 million this year from P1.14 billion in 1997.
The government has already set a March 2000 deadline for the sale of its remaining 45.6 percent stake in the bank.
Last week, the Department of Finance (DOF) chose the consortium of Lehman Brothers, Capital Strategies Ltd., and ING Barings as financial advisors for the bank's privatization.
The three companies bested other investment firms which submitted proposals to the government on PNB's privatization. These investment companies include Morgan Stanley, ABN Amro, Rothschild Asset Management, Mercer Management Consulting, JP Morgan and Lek/Alcar Consulting Group.
Although PAL, his darling company, continues to hog the headlines due to its failed negotiations with major foreign airline companies, the source said Tan's overall value has not diminished. PAL is expected to submit to the SEC today its scaled-down program to rehabilitate the ailing airline.
Tan, the lone Filipino to be recognized by Forbes Magazine as one of the world's richest, reportedly remains undisputed in the wealth ratings game.
"You have to remember, he owns the second largest beer company, Asia Brewery; the country's largest cigarette manufacturing, Fortune Tobacco; the largest piggery farm Foremost Farms; PAL; Allied Bank, Century Park Hotel, and a number of unidentified businesses operating here and abroad. What Lucio Tan wants, Lucio Tan gets," the source said.
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