Another company is biting the dust due to the adverse impact of the lingering COVID-19 pandemic.
Ultra bilyonaryo Lucio Tan’s Philippine National Bank has given up on its business venture with Mizuho, one of Japan’s leading financial institutions, just 16 months after infusing fresh cash into the company.
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The PNB board advised the Philippine Stock Exchange (PSE) that it was “shortening” the corporate life of PNB-Mizuho Leasing and Finance Corporation (PMLFC) to 31 March 2024.
“PNB and Mizuho Leasing mutually agreed to wind down operations of PMLFC due to the impact of the COVID-19 pandemic to the operations of the joint venture company and the domestic leasing industry,” said PNB.
The announcement has come as a surprise considering that PNB just announced in February 2021 that it was investing P515 million. The fresh cash injection would have raised PNB’s stake in the venture from 75 percent to 83.5 percent.
“Given the focus of the government on continuing its ‘Build, Build, Build’ program, we see prospects in the leasing business. We are expecting to see growth in the sectors connected with the government’s priority projects,” said PNB president Wick Veloso in a statement.
PNB formed PMFLC (formerly PNB-IBJL Leasing and Finance) in 1996 with Mizuho taking up 25 percent.
The firm, which focuses on small to medium Japanese firms operating in the Philippines, offers financial lease (direct lease, sale-leaseback, lease-sublease and foreign currency leasing), operating lease (through wholly-owned subsidiary, PNB-Mizuho Equipment Rentals), term loans (for productive capital expenditures secured by chattel mortgage), receivable discounting (purchase of short-term trade receivables and installment papers) and floor stock financing (short-term loan against assignment of inventories, e.g., motor vehicles).