MPIC to reduce stake in Maynilad
THE PHILIPPINE venture of billionaire Anthoni Salim’s First Pacific Co. plans to raise as much as P12-billion ($240-million) selling a part of its water unit this year to help build more toll roads in the Southeast Asian country.
Metro Pacific Investments Corp. (MPIC) is in talks with a potential buyer to sell as much as 12% of Maynilad Water Services, Inc., which owns the rights to supply water to half of Manila, President Jose Ma. K. Lim said in an April 6 interview. A successful deal will reduce Metro Pacific’s stake in Maynilad to 40%.
Salim is among tycoons including San Miguel Corp.’s Ramon S. Ang and SM Group’s Henry Sy vying for a slice of projects in the Philippines as President Rodrigo R. Duterte seeks to upgrade the nation’s roads, bridges and railways with record spending. The government and companies plan to plow in P1.83 trillion in infrastructure, or 5.7% of GDP by 2022, compared with a budget of P861 billion this year, or 3.5% of GDP.
Metro Pacific is raising funds as it plans to build P153 billion of toll roads in an effort to at least double revenue at that venture to about a third of the group’s sales in five years, Mr. Lim said. Its power business — through a stake in Manila Electric Co. — accounts for 40% of Metro Pacific’s revenue, he said.
“We’re cashing in on the value we created in Maynilad in order to fund new concessions,” Mr. Lim said on the sidelines of an event organized by the Association of Southeast Asian Nations in Cebu province. “We have a lot on our plate right now.”
UNSOLICITED BIDS
A faster way to get infrastructure projects rolling is for companies to make unsolicited bids, which can be put for challenge by the government, Mr. Lim said. His company has started building a P27.9-billion, 8.25-kilometer (5.1 miles) bridge in Cebu province after winning the project under such a proposal. It has also submitted a similar bid to build a waste-to-energy facility in Quezon City near Manila.
MPIC is in talks with a potential foreign partner for its plan to bid for regional airport projects to be auctioned by the government, Mr. Lim said. That may include a bid to expand an airport in Clark, a former US military base north of the capital.
A venture of JG Summit Holdings, Inc. and Filinvest Development Corp. has tendered a P187-billion proposal to upgrade and expand the Clark airport under a 50-year concession.
MPIC is also growing its health care business, where it may sell shares through an initial public offering should it need more funding. The company is also pursuing a proposal to upgrade Manila’s Metro Rail Transit 3. — Bloomberg
MPIC is one of three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary Media-Quest Holdings, Inc., has a majority stake in Business-World through the Philippine Star Group, which it controls.