Wednesday, 22 July 2009

San Miguel Corp takes driver’s seat in road project

By Jenniffer B. Austria
With AFP
Manila Standard

FOOD and beverage giant San Miguel Corp. said yesterday it will take a “significant” stake in a P15-billion toll road project as it diversifies beyond its core brewing business.

Listed San Miguel told the Philippine Stock Exchange it signed a non-binding agreement to acquire a significant stake in Private Infrastructure Development Corp., the consortium behind the Tarlac-Pangasinan-La Union Toll Expressway project.

The partners in the 88-kilometer toll road were all construction firms, and the final agreement would be subject to government approval, San Miguel said without giving other details.

“This is in line with our diversification plans and we’re happy to be a catalyst for the infrastructure needs of the country,” said San Miguel president and chief operating officer Ramon Ang.

“The North to Central Luzon stretch is a potentially dynamic industrial corridor and the proposed expressway will make it easier and more cost-effective to move goods and people from one point of Luzon to another,” Ang said.

“As a food and beverage conglomerate with one of the most developed distribution networks in the country, we have a strong interest in making it happen.”

Under the plan, the 88-kilometer expressway will extend from La Paz, Tarlac, to Rosario to La Union. The expressway is expected cut by half the travel time to Baguio from Manila.

Informed sources said San Miguel wanted a 49-percent stake in the consortium, with an option to go up to 51 percent.

DMCI Holdings Inc. now has 34-percent equity stake in the consortium.

Lopez-owned First Balfour Inc. also owns 34 percent but assigned its option to participate in the project to Metro Pacific Investments Corp. when the group sold its tollways business to Metro Pacific.

The other members of the consortium are EEI Corp., R.D. Policarpio and Co. Inc., D.M. Wenceslao and Associates Inc., J.V. Angeles Construction, J.E. Manalo and Co. Inc., New Kanlaon Construction Inc. and Rockford Development.

Metro Pacific earlier said that it might only join one leg of the expressway project since initial studies showed it wsa only financially viable from Capas, Tarlac, to Gerona, and that there wsa not much traffic from Gerona to Rosario, La Union.

Construction of the Tarlac-La Union expressway is scheduled from 2009 until 2013. The consortium is now talking to banks and other financial institutions to help raise funds to finance the project.

The winning consortium will invest P13 billion in the project while the Public Works Department will finance the remaining P2 billion, mainly for right-of-way.

In the past year, San Miguel has also taken a significant stake in Manila Electric Co. and oil refiner Petron Corp., and is now in venturing into telecommunications with Qatar Telecom into as part of its diversification.

San Miguel also said it was interested in acquiring the Philippine and regional operations of Dole Food Co., the world’s largest fruit and vegetable producer.

“We confirm that the company is interested in Dole Food Co. and its other units in the Asia-Pacific region,” San Miguel said.

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