Metro Pacific nears deal for 40% of Manila North Tollways

Metro Pacific Corp. is nearing a deal for the acquisition of a 40 percent stake in Manila North Tollways Corp. (MNTC), which holds the 25-year franchise to operate the North Luzon Expressway (NLEX) connecting metropolitan Manila to the provinces in the north.

Hong Kong-based First Pacific Co. managing director Manuel V. Pangilinan said in an interview that Metro Pacific is "making good progress" in its talks with Egis. He said the two parties have agreed on a purchase price. "We are replicating the same formula of Egis with Leighton," he added.

Leighton Contractors Asia (owned by Leighton International Tollways Corp. of Australia) and Egis Projects (subsidiary of Groupe Egis of France) own 16.5 percent and 13.9 percent of MNTC, respectively. Egis invested $22 million in the project.

Lopez-owned First Philippine Infrastructure Development Corp. (FPIDC) controls the majority stake of 61.5 percent while the Philippine National Construction Corp. (PNCC) has 2.5 percent. FPIDC is the company that holds the stakes of Lopez firms Benpres and First Philippine Holdings Corp. in MNTC.

If Metro Pacific succeeds in convincing Benpres to sell its 10 percent stake, then the former will be able to control majority of MNTC. First Philippine Holdings earlier said it was not selling its shares in MNTC. Benpres, which is undergoing debt restructuring, has identified its stake in MNTC as one of the investments which it is willing to sell to raise funds to pay off its maturing obligations.

"Benpres will sell its stake at the right price," a senior official of the Lopez group told The STAR. But First Philippine Holdings will not follow suit, the official added.

Pangilinan’s group earlier offered to purchase for $40 million the 51-percent stake of First Philippine Holdings in FPIDC. The offer was turned down because it was considered too low. The Lopezes believe that First Holdings’ stake is worth at least $200 million.

FPIDC was incorporated in April 1994. It is a wholly-owned transportation infrastructure subsidiary of First Philippine Holdings and Benpres Holdings Corp., (BHC).

First Pacific’s investments in region include those in Philippine Long Distance Telephone Co. (PLDT), Indofood in Indonesia, Metro Pacific, and a minority stake in the Indonesia-controlled company that operates the Skyway. The 9.3-kilometer Skyway is a joint venture of state-owned PNCC and Indonesian firm P.T. Citra Lamtoro Gung Persada through Citra Metro Manila Tollways Corp. Metro Pacific currently owns 10 percent of Citra Metro Manila through Metro Strategic Infrastructure Holdings.

Metro Pacific said it continues to look for investment opportunities in infrastructure projects in the Philippines, particularly toll roads. "Metro Pacific maintains an interest in potential opportunities in Philippine infrastructure projects generally, and in toll roads particularly," the company said earlier.

First Pacific wanted to increase its stake in the Indonesian-controlled company that operates the Skyway in Metro Manila so it could help raise at least P12.5 billion for the upgrade and integration of the South Luzon Expressway (SLEX) all the way to the Port of Batangas, south of Manila.

While the First Pacific group wants to invest in the upgrade of the existing street-level infrastructure in South Luzon, the former is facing problems convincing the Indonesian shareholders of Citra Metro Manila to go into this venture.

"What should be done is to upgrade the existing street level in South Luzon, extend it to Calamba, and then extend to the STAR tollway," Pangilinan said.