Friday, 12 March 2010

Rail firm says no deal yet on $1.3-B project

Lenie Lectura
Business Mirror

UNIVERSAL LRT Corp. (ULC), the main proponent of the Metro Rail Transit 7 (MRT7), said there are many firms—including diversifying conglomerate San Miguel Corp. (SMC)—that have expressed interest to take part in the $1.3-billion railway project but no agreement has been reached as yet.

“To set the record straight, ULC has not sold its shares to SMC. While it is true that Morgan Stanley has approached SMC to be part of the project, there are other interested parties who are also in talks with our financial advisor,” said ULC vice chairman Roberto de Ocampo in a statement.

The company has tasked Morgan Stanley to be the financial advisor for its $1.3-billion railway project. The financial services firm will assist ULC in raising equity and debt needed to finance the construction of the ambitious project.

De Ocampo added that “rest assured that ULC remains steadfast in its commitment to start the project the soonest possible time.”

SMC, in an earlier disclosure to the local bourse, said it has been offered a majority stake in the project and that negotiations are ongoing with the members of the consortium. It added that due diligence audit has also started.

Businessman Salvador “Buddy” Zamora owns 63 percent of the consortium that built the MRT7. Private entities control the remaining 37 percent. Zamora acquired majority control of the consortium from its original proponent Israeli businessman Eli Levin in 2008.

The project consists of a 23-kilometer rail transit system with 14 stations that will be connected to the MRT-3 North Avenue station in Quezon City, stretching all the way to Commonwealth Avenue, Regalado Avenue, Quirino Avenue extension up to San Jose del Monte, Bulacan with a 22-kilometer access road component.

Eight of the stations will be elevated, three will be at street-level and the rest will be underground.

MRT7 is envisioned to transport 500,000 passengers daily although it can handle as much as 800,000.

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