The Insurance Commission (IC) has approved 6762 Holdings Corp.’s buy out of National Life Insurance Co. of the Philippines (NLIC), at a selling price of P1.054 billion.
In a statement on Tuesday, the IC said that 6762 Holdings Corp., has emerged as the winning bidder for the sale of NLIC shares and debts.
It said a Sale and Purchase Agreement in favor of 6762 Holdings Corp. was signed on May 6, after several extensions granted to NLIC to give more time for the potential investor to conduct due diligence.
The IC said the sale includes 1,500,000 common shares, as well as the premium deposit fund, agency retirement fund, advances from shareholders and related parties, and deposit for future subscription account of NLIC.
The entry of an investor is a prerequisite embodied in the 2013 modified rehabilitation plan for NLIC approved by the IC, in which the regulator decided that rehabilitation provides a better option for all interested parties, especially for the policyholders, the IC explained.
It said the stocks and liabilities amounting to P2.648 billion fetched a purchase price of P1.054 billion or a net recovery rate of 35 percent to 40 percent, which could otherwise have realized a net value of just 7 percent under a liquidation scenario.
Under this agreement, the IC said a new company shall be incorporated by 6762 Holdings Corp. to be designated as the “Rehabilitated NLIC” which shall be allowed to use the corporate name “National Life Insurance Company of the Philippines” and shall be required to comply with the statutory net worth requirements applicable to existing insurance companies.
“With the execution of the Sale and Purchase Agreement, we take a major step toward concluding a successful life insurer rehabilitation in the Philippine insurance industry,” Insurance Commissioner Emmanuel Dooc said.
He said the agreement contains provisions which must be complied with before the completion of the transaction including redemption of insurance policies, payment of cash surrender values, and conversion of term policies.
The company will continue to be under the close supervision of the Commission until the regulator gains confidence that the company can run its operations normally.
Following the closing of the transaction, the IC said it will conduct an examination of the affairs and financial status of the company to confirm its compliance with the statutory and regulatory financial requirements.