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THE
Philippine National Bank (PNB) is getting P700 million
from the sale of its 40-percent stake in Beneficial Life
Insurance.
The sale
will be completed on November 30, 2008, but its banking
relationship with Beneficial Life, also known as Benlife,
will continue for the next three years, according to the
memorandum of agreement (MOA) on the stake sale signed
by the parties involved in the transaction.
The
Tan-led bank on Monday said it is selling its 40-percent
stake in the life-insurance firm to the Fernandez
family-controlled FMF Development Corp. and Merje
Trading Inc.
In a
disclosure to the Philippine Stock Exchange, the bank
said the divestment will allow the bank to “concentrate
on its bancassurance business with PNB Life Insurance
Inc.”
PNB Life
is the former New York Life (Philippines), which was
controlled by Allied Banking Corp., another bank
controlled by tycoon Lucio Tan, which is to be merged
with PNB within the year.
The MOA
executed on May 30 states that the total purchase price
is P700 million, or P43.95 per share. Fifty percent of
the amount was paid upon execution of the agreement, the
remaining to be settled within six months—on or before
November 30, 2008.
On July
15,1996, PNB acquired a 40-percent ownership in Benlife
and formed the Beneficial-PNB Life Insurance Co. Inc.,
which was then the life- insurance arm of PNB. It was
51-percent owned by FMF Development Corp.
Benlife
markets life insurance, endowment policies and
group-term benefits.
Upon the
acquisition in 1996, PNB owned 20.026 million fully paid
shares with a par value of P1 per share.
Under
the present deal, FMF is buying 15,020,197 shares and
Merje is buying 5,006,733 shares at the agreed price of
P700 million.
It was
agreed, however, that the banking relationship between
PNB and Benlife, upon completion of the stake sale, will
continue for the next three years.
“The
seller [PNB] guarantees that the existing banking
relationship between the sellers [PNB] and Benlife in
relation to the acceptance of premium payments and
servicing of Benlife’s policies by the domestic and
foreign branches of PNB shall continue for a period of
three years from date hereof unless terminated by mutual
agreement of the seller and Benlife,” the MOA said.
For the
next three years, PNB will still accept premium payments
for Benlife, as well as other banking transactions
related to the life-insurance business.
PNB will
also continue the salary- deduction arrangements with
all PNB employees that hold Benlife insurance policies. |
