CIMB, the Malaysian banking giant, was bidding to acquire the Bank of Commerce when the sale was halted because of major issues. Owners of the bank San Miguel Corp has said it is willing to walk away from the Php12.2 bilion deal if the issues are not resolved soon enough.
A week was the given timetable for the food and beverage conglomerate to determine whether to complete the transaction or break off the engagement with CIMB, according to SMC President Ramon S. Ang.
He said, "I think we're in the last stage. If this deal does not push through, then I will go run the bank. And if I will be the one to run it, I will increase its capital by US$2 billion."
About nine months ago, CIMB agreed to purchase 60% stake in SMC's 84% shareholdings in the bank. According to industry resources, the current constitutional restrictions on real estate ownership by foreigners was one of the major stumbling blocks in the deal.
Since much of the assets of the bank was in real estate, including some foreclosed assets and actual bank premises, some assets need to be placed with a realty company as CIMB could not control these assets because of its foreign status. Clearly, it was CIMB's lack of legal capacity to absorb and own real estate assets which lead to the impasse.
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