09 August 2011


Ongpin: DBP lawyers misleading public

Former Trade and Industry minister Roberto Ongpin said Monday that lawyers of the state-owned Development Bank of the Philippines are misleading the public about the loans extended to his company to finance the acquisition of Philex Mining Corp. shares in 2009.

“For obvious reasons, they simply ignore the fact that these loans were completely above board, fully collateralized, have been fully paid and in fact were extremely profitable loans for DBP,” Ongpin said in a statement.

Ongpin said DBP lawyers had also made a big issue out of the P625,000 paid-up capital of Deltaventure Resources Inc., which he owns. The lawyers claimed the loan of P510 million was “816 times” more than the paid-up capital of Deltaventure.

Ongpin said Deltaventure’s paid-up capital was of absolutely no significance to the loan.

“What is important is that by 2008, the stockholders’ equity of DVRI was already P114 million. In fact, when the DBP loans were made in 2009, the stockholders’ equity of DVRI was already more than P1 billion. “To call DVRI a ‘puny’ company is ridiculous and can only be a fabrication of a warped mind,” Ongpin said.

He said the collateral provided by a borrower was the most critical consideration in granting a loan.

“In this case, the [two] loans to DVRI amounting to a total of P660 million was secured by collateral valued at more than P1.87 billion, which was 2.77 times the loan amount, which is far superior to DBP’s and other banks’ requirement of a 2 times cover,” Ongpin said.

DBP lawyers, he said, claimed that the bank was deprived of “a potential trading gain” of over P412.4 million when it sold 50 million Philex shares to DVRI at P12.75 and which were sold one month later by DVRI at P21 per share.

“This allegation is preposterous, patently illogical and obviously intended to confuse,” Ongpin said.

The Philex shares were bought from DBP by Ongpin’s companies at P12.75 per share on Nov. 5, 2009. Philex shares prior to the transaction had been trading at a range of P9 to P11 per share. Philex shares even traded at less than P12.75 on several occasions after the Nov. 5 closing date.

“So, clearly, [then DBP president Reynaldo] David made a sound decision to dispose of part of his Philex holdings at P12.75.

“So, unless Mr. David was expected to be someone who could foretell future stock market price movements, Mr. David should be lauded, instead of criticized, for locking in profits for DBP,” Ongpin said.






Covering up a suicide




09 AUGUST 2011




For the benefit of those who want to find out more about these loans by Ongpin, especially opinion writers and other journalists, who have been writing about this loan in connection with the Philex shares (considering that it’s about shares and their profitability), here are the facts on record:

Ongpin first made his first major acquisition in Philex in early 2007 by buying a 5 percent stake from BDO, which had been owned by PCIB, and which BDO had acquired earlier. Ongpin’s acquisition of that block was about P5 per share, an investment made for London-based fund manager Ashmore. He then bought from Ashmore the shares because the stocks of Philex started appreciating.

Ongpin then bought John Gokongwei’s shares, and his third acquisition was from Manny Zamora. Consequently, Ongpin, over a three-year period, organized financing of P4 billion, dealing with six banks, in addition to Ashmore, which he represents in the country. His total loans with DBP amounted to less than 20 percent of the total financing Ongpin had.

Ongpin knew that Manny Pangilinan wanted control of Philex and was willing to buy at premium. When DBP sold 50 million of its Philex shares, the daily trade a week before the sale was around P9-11 per share.  Consequently, at the closing price of the transaction, it was already at P12.75 per share.

Note this clearly: DBP was happy to lock in profits so that the balance of DBP’s portfolio at Philex would be gravy, I repeat gravy, to the bank. Now, why should the former DBP president and the past board be faulted when DBP was making money? To blame David for not foreseeing that Ongpin would deal with Manny Pangilinan at P21 per share is the height of naivete.

This transaction only showed the business acumen of Ongpin and that of Pangilinan, who not only had full control of Philex, a very profitable mining concern, but had actually more than the doubled value of his investment.

Santa Banana, you don’t have to be rocket scientist to know when to deal! It’s common business sense, which many, including some columnists, and especially Nuñez and others at DBP, obviously don’t.

Why Ongpin and past DBP executives and board should be sued is beyond me.