CVC Buys Stake in Rizal Commercial Banking

Buyout shop CVC Capital Partners paid 4.96 billion Philippine pesos ($115 million) for a 15% stake in Rizal Commercial Banking Corp., Reuters reported. CVC will take two board seats with the company, which is the Philippines’ fifth-largest bank by assets. Proceeds from the deal will be used, in part, to buy up small and mid-sized banks in the Philippines.

(Reuters) – Private equity firm CVC Capital Partners Ltd has acquired 15 percent of Rizal Commercial Banking Corp for 4.96 billion Philippine pesos ($115 million), the bank said on Thursday.

CVC, which manages more than $42 billion in funds globally, will receive two seats on the board of RCBC, the Philippines’ fifth-largest bank by assets.

Some of the funds from CVC’s investment may be used to buy small and mid-sized banks in the Philippines, the statement added.

“We are very positive on prospects for the Philippines economy and growth prospects for its attractive banking sector,” said Brian Hong, managing director and a member of CVC’s global financial institutions group.

The infusion will boost RCBC’s Tier 1 capital adequacy ratio to 19.89 percent.

In March, the bank sold a 7.2 percent stake to International Finance Corp, the World Bank’s private sector arm, for about $50 million and said it was in talks with a potential investor to sell a minority stake.

Under the agreement with CVC, RCBC will sell 171,000 common shares at 29 pesos each to Hexagon Investment Holdings Ltd, a CVC-owned investment vehicle.

RCBC said it expects to close the transaction, which is subject to regulatory and shareholder approval, by the end of June.

On Friday, RCBC shares rose as much as 2.3 percent to 29.15 pesos, before falling back to trade at 27.80.

Citigroup Inc was sole financial advisor to RCBC on the transaction. ($1 = 43.000 Philippine Pesos) (Editing by Chris Lewis)