Daily Star logoBusiness
Bacolod City, PhilippinesMonday, February 27, 2012
Front Page
Negros Oriental
Star Business
Opinion
Sports
Police Beat
Star Life
People & Events
Eguide
Events
Schedules
Obituaries
Congratulations
Classified Ads
SSS, GSIS urged to apply
‘Swiss challenge’ on deals

To get the best prices, the Social Security System and Government Service Insurance System should submit to a Swiss challenge all unsolicited offers to purchase their marketable securities, the Trade Union Congress of the Philippines said in a press release.

“A Swiss challenge will allow the discovery of other potential investors who may be willing to acquire at higher prices the securities held by SSS or GSIS,” said TUCP president and former Sen. Ernesto Herrera said.

In a Swiss challenge, upon receiving an unsolicited bid, SSS and GSIS would publish the offer and openly invite third parties to match or exceed the original tender, the press release said.

Some Swiss challenges also allow the entity that made the first offer to match or better the best bid that comes out of the process, it added.

A Commission on Audit report earlier questioned the sale by SSS of its 62,990,638 shares in Manila Electric Co. for P5.66 billion to an newly formed entity with net assets of only P60 million.

The Meralco shares were sold at P90 each to Global 5000 Investment Corp. in December 2008. SSS received P1.133 billion as down payment in February 2009, with the balance payable in three installments, with the final payment due last month, the press release said.

Herrera said that if SSS had submitted Global 5000’s offer to a Swiss challenge, other prospective buyers of the Meralco shares might have stepped in with superior bids.

We must stress that SSS and GSIS are at all times duty-bound to get the best value out of every investment they make using the hard-earned contributions of our workers, Herrera, former chairman of the Senate committee on labor, employment and human resources development said.

Herrera recalled that GSIS also missed a huge opportunity to earn a lot of money when it hastily sold its 300,963,189 shares in Meralco at P83 each in October 2008, without the benefit of a Swiss challenge.

The Meralco shares were sold at P90 each, for a total of P27 billion, to San Miguel Corp., the press release said.

However, since GSIS got paid via installment over a three-year period, analysts estimated the "real" selling price at only P83 per share, after factoring in the cost of money, it added.*

back to top

Business
ButtonSSS, GSIS urged to apply ‘Swiss challenge’ on deals
ButtonEntrepreneurs, taxpayers told to pay dues or face penalties
ButtonBacolod BIR exceeds collection by 17.93%

Button131 job applicants ‘hired on-the-spot’