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First Pacific unit in Philippines seeks investor in tollroad company

Publication Date : 31-05-2014


Metro Pacific Investments Corp., the Philippine unit of Hong Kong-based First Pacific Company Limited, is in talks to sell up to a 20-percent stake in its tollroad unit as it seeks financial support for possible big-ticket expressway projects it may bag under the government’s public private partnership (PPP) program.

Metro Pacific chief financial officer David Nicol said at the sidelines of the company’s stockholders’ meeting that Metro Pacific was in talks with two financial investor groups from Europe and China on the sale of a stake in Metro Pacific Tollways Corp.

Metro Pacific Tollways operates the 90-kilomtre North Luzon Expressway and the 14-km Manila-Cavite Expressway, which serves about 270,000 vehicles a day.

Metro Pacific is readying a bid for the June 2 deadline for the 47-kilometre Cavite-Laguna Expressway PPP, estimated to cost about 35.4 billion pesos (US$787 million). Nicol said a decision to bring in a partner would depend on whether the company would win the Cavite-Laguna Expressway PPP.

“They are long-term equity investors,” Nicol said, adding that a deal could be concluded in the third quarter if Metro Pacific decided to sell.

Nicol said it made more sense to tap an investment group rather than raise funds in the capital markets given that the tollroad business was currently undervalued by third-party financial analysts and the timing was less than ideal.

He said analysts currently valued the company’s tollroad business at P48 billion but Nicol said they valued Metro Pacific Tollways closer to P80 billion after factoring in expansion phases, including the P18-billion Metro Manila connector road linking NLEx with the South Luzon Expressway of rival San Miguel Corp.

“We think we can [bring in a partner] at a price that is way above what analysts are valuing us today,” Nicol said. Metro Pacific Tollways owns a controlling stake in Manila North Tollways Corp., which operates NLEx. Manila North Tollways already tapped the bond market in the first quarter.

MNTC is raising fresh funds for the construction of the North Luzon Expressway-Segment 10 that will link the MacArthur Highway in Valenzuela City to the C-3 Road in Caloocan City.


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