Benpres eyes $100M from sale of tollways unit

Lopez-owned conglomerate Benpres Holdings Corp. is eyeing to raise over $100 million from the sale of its 33-percent stake in Manila North Tollways Corp. either through a secondary offering or private placement of shares.

In a briefing with reporters following the company’s annual shareholders’ meeting yesterday, Benpres president and chief operating officer Angel Ong said the sale is part of the group’s ongoing asset divestment program aimed at trimming its debt by half over a period of one year.

Benpres’ debt has dropped to around $365 million as of end-2007 from $560 million in 2002. Majority of the original debt was used to fund investments in Bayan Telecommunications Inc. and the failed operations of its former water unit Maynilad Water Services Inc.

In 2006, Maynilad was acquired by the joint venture of Metro Pacific Investments Corp. and the Consunji-owned DMCI Holdings Inc.

Ong said the MNTC stake may be sold through the market as Benpres holds it through First Philippine Infrastructure, a company which underwent backdoor listing in early 2007 via City Resources Philippines Corp.

He said Macquarie Securities has been appointed as financial advisor for the planned sale of the MNTC stake.

While Ong couldn’t give a timetable when the sale would be consummated, he said the group has received offers from several companies for its MNTC stake. “The price is a moving target. We’re in discussions with some, so let’s see,” he said.

Also part of the divestment program is the planned initial public offering (IPO) of upscale property developer Rockwell Land Corp. either this year or next. Benpres holds a 24.5-percent stake in Rockwell.

Ong said another unit, Sky Cable, might also go public either in 2009 or 2010 and part of the proceeds will go to repaying Benpres’ obligations.

Eugenio Lopez III, Benpres treasurer and ABS-CBN Broadcasting Corp. chairman, said Sky Cable, the largest cable service provider in the country, is in a “position to go public” after swinging to profitability last year with net earnings of P122.6 million on the back of a seven percent rise in subscription revenues.

Lopez said proceeds from Sky Cable’s IPO will be used to fund the roll out of more digital boxes, a move aimed at reducing cable TV signal theft.

Last year, Sky Cable issued 65,000 digital boxes in Metro Manila and Cebu. For this year, it plans to roll out 40,000 more units.

Meanwhile, Ong said Benpres remains optimistic it could win the approval of its creditors for its revised debt restructuring plan which had been on the table since August 2007. The updated plan calls for the restructuring of debt payments over a period of 12 years.

“Debt restructuring has been an open-ended process and hopefully we could close it this year. We have already passed the critical stage with the significant reduction of our debt to only $365 million from the original debt of $500 million plus,” Ong said.