Metro Pacific eyes greater control of MNTC

Metro Pacific Investments Corp. (MPIC), which now owns a controlling 67.1 percent of the Manila North Tollways Corp., is looking at further increasing its stake in MNTC, the concession holder of the North Luzon Expressway (NLEX).

MPIC chairman Manuel Pangilinan said in an interview that Leighton Asia Ltd. of Australia is interested in divesting from MNTC while Egis Projects S.A. France, reputedly the world’s biggest toll operator, may also sell part of its stake in MNTC.

 Leighton, Egis, and the Philippine National Construction Corp. (PNCC)., the state-owned company that holds the franchise for the operation of the NLEX, own the remaining 32.9 percent interest in MNTC.

MPIC recently completed the acquisition of shares representing approximately 99.84 percent of the outstanding capital stock of First Philippine Infrastructure Inc. (FPII) from First Philippine Holdings Corp. (FPH) and Benpres Holdings Corp., marking the exit of the Lopez Group from the toll road business.

The acquisition resulted in MPIC holding a 67.1 percent effective interest in MNTC and a 46 percent stake in Tollways Management Corp. (TMC). The total consideration for the FPII shares is P12.26 billion, comprising of P11.8 billion in cash and the assumption by MPIC of advances received by Benpres and FPH.

Pangilinan said he expects NLEX to be the second biggest income generator for MPIC next year, next to water concessionaire Maynilad. The hospital business of MPIC will rank third. Currently, Maynilad is the largest revenue contributor for MPIC followed by the hospital group (Makati Medical Center, Davao Doctors Hospital and Cardinal Santos).

MPIC, the local unit of Hong Kong-based investment holding firm First Pacific, is expected to end 2008 with a core profit of P250 million, even as Pangilinan said.

MNTC was granted the supplemental toll operating agreement in June 1998 to finance, design, construct, operate and maintain the toll roads, toll facilities and other facilities generating toll-related income, in respect of the NLEX. MNTC has the right to operate and manage the existing 83.7-kilometer NLEX and the 8.5-km Subic-Tipo Expressway; and buildout, operate and manage Segment 8.1 of Phrase 2, which is the continuation of the missing link of C5 that would extend up to the Manila Port Area, crossing the NLEX near the Valenzuela interchange, and will decongest the traffic ingress into the Balintawak stretch of the NLEX.

According to Pangilinan, they are now looking at the construction of the extension of NLEX to Rosario, La Union, which spans around 84 kms long.

Earlier, the MPIC official said the steady increase in population and urbanization should keep pace with the provision of domestic infrastructure that links resources to their channels and destinations.

“The MNTC acquisition will enable the company to have a balanced and sizeable portfolio of investments which can deliver robust profits for the long-term on a sustainable basis. MPIC will continue to consider opportunities in its core sectors of infrastructure and healthcare, as well as in growth segments such as mining-but with continuing emphasis on managing and improving the efficiencies of its existing investee companies,” Pangilinan said.

For his part, MPIC president and CEO Jose Ma. Lim explained that their involvement in tollroad operations will complement and strengthen their existing investment portfolio to achieve greater shareholder value.

He said that with the acquisition of MNTC, “we will have a balanced portfolio of investments that serves as a cornerstone for the future growth of our core businesses: utilities, infrastructure and healthcare.”

Lim said the acquisition of FPII would be funded by debt and equity financing. “We are in discussions with local banks for P6.68 billion debt financing,” he said, adding that the funding gap will be financed by First Pacific.