Tuesday, 7 April 2009

MetroPac plans higher stake in Philippine toll road unit

Honey Madrilejos-Reyes
Business Mirror

METRO Pacific Investments Corp. (MPIC) is planning to raise its equity stake in Citra Metro Manila Tollways Corp. (CMMTC), the contract builder of the Metro Manila Skyway System.

From the current equity equivalent to 5 percent, MPIC chairman Manuel V. Pangilinan said they are in talks to increase the stake to a “substantial level.” Doing this would naturally mean additional capital injection in CMMTC, he said.

“We plan to increase it substantially. We will just announce if a definitive agreement is signed. CMMTC’s pro-ject complements the South Luzon Expressway [Slex] and what we have in the north,” said Pangilinan.

He did not provide further details in the plan but said they may have to source funding to support the additional investment.

Despite its target to become a majority shareholder, he said PT Citra Marga of Indonesia will remain an important stakeholder of CMMTC, as well as the Philippine National Construction Corp. (PNCC), which holds the 30-year concession in the operation of the skyway.

MPIC appears encouraged by CMMTC’s ongoing Skyway Stage 2 project. To be put up at a cost of $192 million (roughly P10 billion), the pro-ject will extend the existing Skyway from Bicutan to Alabang in Muntinlupa City, while facilitating the needed rehabilitation works on the existing expressway, including toll collection plazas.

The Metro Manila Skyway Project is being implemented using the build-transfer-operate scheme, with CMMTC financing the design and construction of the toll road. The infrastructure will be transferred to the government after 30 years.

MPIC is also interested to take part on the Coastal Road toll project.

Earlier, the company said it is planning to initiate talks with the Japan Bank for International Cooperation and World Bank for possible official development assistance to help fund its toll road projects in north Luzon.

In an interview at the groundbreaking rites for Segment 8.1 of the North Luzon Expressway (Nlex) on Thursday, company president and chief executive Ramon S. Fernandez said an investment of P38.1 billion is needed to lay down the ambitious project.

“We are looking for ways to raise the funding needed. But it would be a combination of loans and additional equity,” he said.

Fernandez said the company will be selecting in three weeks the financial advisor to help evaluate the funding sources.

Earlier, MPIC successfully closed the financing for segment 8.1 worth P2.1-billion via a seven-year loan facility agreement with the Philippine National Bank.

The project is a 2.7-kilometer roadway linking Mindanao Avenue in Quezon City to the Nlex main gateway in Valenzuela City. It will have 2x2 lanes, a two-way service road and a clover leaf interchange north of the Balintawak toll plaza.

With Leighton Contractors (Philippines) Inc. as civil works contractor, Segment 8.1 is expected to be completed on or before April 30, 2010.

Four more toll road projects under the Phase 2— Segment 9 and Segment 10 of MacArthur Highway in Valenzuela City, the Nlex-Slex connector road expressway and the Skyway Stage 2—are in the pipeline, with an aggregate length of 22.48 kilometers. The projects are expected to provide increased access to Nlex and substantially ease traffic congestion in Metro Manila.

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