PDIC to liquidate failed Exportbank
MANILA, Philippines (UPDATED) – With no white knight to help it get back on its feet, Export and Industry Bank (Exportbank) will close its doors for good.
State-run insurer Philippine Deposit Insurance Corp. (PDIC) announced Tuesday, April 16, it would liquidate the shuttered bank after failing to get investors to come in and rehabilitate it.
PDIC said in a statement it was directed by the Monetary Board of the Bangko Sentral ng Pilipinas to proceed with Exportbank’s liquidation pursuant to Section 30 of Republic Act 7653 or the New Central Bank Act.
“In line with procedures, PDIC will file with the liquidation court a petition for assistance in the liquidation of the closed bank,” it said.
Liquidation refers to the sale of a company’s assets to raise cash, which is then used to settle its liabilities. Creditors are prioritized, and any leftovers are distributed among shareholders.
PDIC said the liquidation process would involve “collection and resolution of loan accounts, and disposal or sale of assets via bidding and negotiated sale.”
If it went through, bidding of Exportbank’s rehabilitation would have consisted of two phases: first, the sale of its assets and liabilities, and then the sale of its commercial banking license.
The government twice attempted to bid out Exportbank’s assets and liabilities—in October 2012 and March 2013—but there were no takers. Groups that gave letters of interest to participate in the first bidding did not submit bids, while no letters of interest were submitted in the second bidding at all.
Exportbank was ordered closed by the Monetary Board on April 26, 2012 because it could no longer service withdrawals.
As of December 31, 2012, the bank’s net realizable assets worth P13.65 billion were not enough to cover its total liabilities of P24.67 billion, PDIC said. – Rappler.com