Monday, 18 January 2010

San Miguel eyeing gov’t stake in SLEx

Kristine Jane R. Liu

Metro Pacific Tollways Corp. will face competition in its bid to operate the two main entry and exit points north and south of Metro Manila after San Miguel Corp. said it was also interested to buy state-controlled Philippine National Construction Corp. (PNCC)’s stake in South Luzon Expressway (SLEx).

San Miguel President Ramon S. Ang said his firm would seek the PNCC’s 20% stake in South Luzon Tollway Corp., the joint venture that upgraded the SLEx, if there would be a public bidding.

PNCC had said it would sell its stake in South Luzon Tollway to pay for P5 billion in debts to the government, build a road that will connect SLEx near the Susana Heights interchange to the southern end of the Daang Hari Road in Cavite, and help the government ease the budget deficit.

The sale of PNCC’s 20% stake in South Luzon Tollway will come in a package, where the buyer will also be required to buy the government-led company’s 40% stake in Manila Toll Expressway System, Inc. (MATES), the operation and maintenance firm for SLEx.

But PNCC’s Malaysian partner in South Luzon Tollway and MATES, MTD Capital Bhd, holds the right of first refusal over PNCC’s stake, which means that Metro Pacific Tollways and the San Miguel camp would only be able to buy the government’s stake if MTD Capital is not interested.

PNCC had said that if the Malaysian firm is not interested to buy the government’s stake, it would go to the Department of Finance to seek an opinion on whether the PNCC should hold an auction for the stake.

MTD Capital, which holds an 80% stake in South Luzon Tollway and a 30% stake in MATES, was the sole funder of the SLEx rehabilitation which began in 2005.

South Luzon Tollway won the right to rehabilitate, expand, operate and maintain the SLEx under a concession agreement approved by Malacañang in 2006.

The project has three components -- the rehabilitation and widening of the 1.2-kilometer (km) Alabang Viaduct which was completed in 2007; the rehabilitation and widening of the 27.3-km expressway linking Alabang to Calamba in Laguna province; and the construction of a 7.6-km extension from Calamba to Sto. Tomas in Batangas province.

Acquiring a stake in SLEx will be a realization of Metro Pacific Tollways’ goal to operate a network of tollways. Metro Pacific Tollways operates the North Luzon Expressway and holds a minority interest in the Skyway 2 project, an extension of the elevated expressway over SLEx from Bicutan in Taguig to Alabang.

Metro Pacific Tollways is a subsidiary of Metro Pacific Investments Corp., the Philippine unit of Hong Kong’s First Pacific Co. Ltd., which partly owns the Philippine Long Distance Telephone (PLDT) Co.
Meanwhile, acquiring a stake in SLEx will make San Miguel a major player in the infrastructure sector.

The diversifying food and beverage conglomerate has already partnered with Star Tollway Corp. to establish Northlink Toll Management, Inc., one of two companies participating in the bidding for the 93.77-km Subic-Clark-Tarlac Expressway. The other bidder is Metro Pacific Tollways.

Last year, San Miguel became the single biggest shareholder in Private Infrastructure Development Corp. after unit Rapid Thoroughfares, Inc. acquired a 35% stake in the consortium that will build the 88-km Tarlac-Pangasinan-La Union Toll Expressway project.

San Miguel had said it plans to increase its stake in Private Infra to at least 51%.

Mediaquest Holdings, Inc., a unit of the PLDT Beneficial Trust Fund, has a minority stake in BusinessWorld.

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