By Ashley Erika O. Jose, Reporter
HONG KONG — Pangilinan-led Metro Pacific Investments Corp. (MPIC) is revisiting plans to divest up to 30% of its stake in its tollway unit, Metro Pacific Tollways Corp. (MPTC), as it seeks to reduce debt in preparation for a merger with San Miguel Corp. (SMC) and a possible initial public offering (IPO).
“We have a few things to fix in the tollways group, both here [Philippines] and in Indonesia. Mainly the high level of debts in both cases,” MPIC Chairman and Chief Executive Officer Manuel V. Pangilinan said at a briefing last week.
The company is now looking at two levels of private placements to help reduce MPTC’s debt, which is now at P200 billion, said MPIC Chief Finance, Risk and Sustainability Officer Chaye Cabal-Revilla.
For now, MPIC is looking for a potential investor who could acquire between 20% and 30% of its stake in MPTC and its Indonesian unit, PT Metro Pacific Tollways Indonesia Services (MPTIS), she said, adding that the company is seeking a “like-minded organization” with experience in tollway operations.
Earlier this year, Mr. Pangilinan announced the deferral of the company’s plan to divest up to a 20% stake in MPTC. While he did not disclose the reason for the pause, he previously confirmed that Mitsui & Co. Ltd. had expressed interest in acquiring up to 20% of MPIC’s stake in MPTC.
To recall, MPTC, together with its subsidiaries and Singapore’s GIC Pte. Ltd., a global institutional investor, finalized their investment cooperation valued at $1 billion for the acquisition of a 35% stake in PT Jasamarga Transjawa Tol (JTT), a major toll road operator in Indonesia, last year.
For now, MPTC is focused on reducing its debt to pursue its plan for a merger with San Miguel or a potential public listing, Mr. Pangilinan said, noting that expansion through its overseas unit is not on the table at the moment, as the tollway operator is not in a position to expand.
Jasamarga manages the 676-kilometer section of the Trans-Java Toll Road, serving between 700,000 and 800,000 vehicles daily.
The toll road is expected to add P30 billion in annual revenue to MPTC, the company said, noting that this will help balance its toll assets with those of San Miguel.
“Before talks with San Miguel become serious, we have to fix our financial position so that the two of us have a stronger position to talk… For now, our main focus is managing the tollways better and strengthening our balance sheet,” Mr. Pangilinan said.
On Friday, MPTC also secured a permit from the Securities and Exchange Commission to offer its P15-billion fixed-rate bond offering, with an oversubscription option of up to P5 billion.
The offer period is targeted to run from Nov. 17 to 21, while the bonds are expected to be issued and listed on the Philippine Dealing and Exchange Corp. (PDEx) on Dec. 2.
The company intends to allocate net proceeds from the offer to partially finance its continued investments in the construction and maintenance of the Manila-Cavite Expressway, Cavite-Laguna Expressway (CALAX), and Lapu-Lapu Expressway (LLEX), as well as the refinancing of its bridge facilities and other corporate purposes.
Metro Pacific Investments Corp. is one of the three key Philippine subsidiaries of Hong Kong-based First Pacific Co. Ltd., alongside Philex Mining Corp. and PLDT Inc.