Metrobank seeks rehabilitation of Lehman local subsidiaries

MANILA, Philippines - Metropolitan Bank & Trust Co., the country’s largest lender in terms of assets, on Monday announced that it has asked a local court to protect its investments in the subsidiaries of collapsed US investment bank Lehman Brothers by placing the units under corporate rehabilitation. In a statement to the Philippine Stock Exchange, Metrobank said it has filed a petition for rehabilitation with prayer for staying all claims, actions and proceedings against the subsidiaries. “Metrobank has submitted to the Regional Trial Court of Makati petitions for Philippine Investment One Inc. and Philippine Investment Two Inc. to be placed under corporate rehabilitation. The said companies are subsidiaries of Singaporean company Lehman Brothers South East Asia Pte Limited," the bank said. Metrobank added that the move was made to ensure the continued normal operations of the companies and defer all claims, actions, and proceedings against them. “This creditor-led rehabilitation is a preemptive move to protect the Bank against possible dissipation of assets by foreign claimants," said Vicente Cuna, Metrobank executive vice president. Metrobank earlier disclosed its aggregate loan exposure amounting to P 2.4 billion to the Lehman subsidiaries based in the Philippines. To date, the loan is current and both companies are operating normally. In its petition, Metrobank said that unless a stay order is issued by the Court, the companies will suffer setbacks in meeting their financial obligations while they are being beleaguered by the attempts of some creditors to enforce payment of their claims to the detriment of other creditors, especially with the recent act of default by Lehman Brothers. The Bank noted that the filing is necessary to prevent any undue preference to certain creditors, and to ensure that the assets of both companies are properly preserved for the benefit of all the creditors during the period of rehabilitation. Philippine Investment One and Two are in the business of investing in non-performing assets of financial institutions under the terms of the Special Purpose Vehicle Act of 2002. “Metrobank is confident that it will recover in full its loan principal, given the amount and quality of assets that the two companies are holding. The loan was used to purchase the foreclosed properties and NPLs (non-performing loans) of DBP (Development Bank of the Philippines) and UCPB (United Coconut Planters Bank). GMANews.TV