Exportbank raises P3 billion in capital from private placement

REPORT FROM BUSINESSWORLD LOCAL COMMERCIAL bank Export and Industry Bank (Exportbank) raised P3 billion in capital from existing and new investors of the company and listed additional shares at the exchange Wednesday. In a briefing, Chairman Jaime C. Gonzalez said the amount was raised through private placements in exchange for 12 billion common B shares with a subscription price of 25 centavos. The existing major stockholders were led by the Lippo and Yao groups while the new stockholders include the groups of AO Capital Partners Ltd. of Hong Kong and Raiffesen Zentralbank Osterreich AG (RZB) of Austria through designated investment vehicle, Extra Year Investments Ltd. The Lippo Group, which channeled its investment through the Hong Kong-based Lippo China Resources Ltd., injected the amount, or 30% of the total funds raised. Mr. Gonzalez said the proceeds would be used for the capital and management restructuring of the bank that began in April 2006. "With the said capital infusion and the sale of its nonperforming assets [worth P10 billion], Exportbank was put in a strong position of high liquidity and a clean asset base. The listing of the Common B shares today is the culmination of all efforts of both our shareholders and regulators to recapitalize and totally transform Exportbank," he said in a speech. Aside from the private placement, he added that the bank plans to raise additional Tier 1 capital in the "near future" as the Monetary Board had approved recently. Mr. Gonzalez said Exportbank was open to mergers and acquisitions but said plans were not definite. "There are just two approaches to that. It’s either we’d very much focus ourselves in our niche or consolidate with other banks. Both approaches are valid, but of course, our shareholders would prefer to have us excel in what we do as consolidating would mean a bigger dilution," he said. Exportbank, which focuses on consumer loans, currently has an asset base of less than P40 billion. It targets to hit P3 billion to P4 billion of loans this year. The bank has 50 main branches and 47 ATMs that are mostly located in Metro Manila and urban cities in Luzon, the Visayas and Mindanao. "Our thrust is to improve, upgrade the facilities and strengthen the people in these branches. We had just relocated four of these into more prominent places," Mr. Gonzalez said. For its property unit, EIB Realty Developers, Inc., Mr. Gonzalez said the company was also in talks with local and foreign investors for possible private placements. "We need to raise sufficient money to make it an active development company again," he told reporters. He added that the listed firm could also tap the stock market for a follow-on offering come March for additional funds. EIB Realty, which is 72% owned by the bank, has idle lots in the Fort, Tagaytay and Davao. — Lovely Nica P. Lee/BusinessWorld