Romero group offers to buy out MPIC in North Harbor joint venture

MANILA, Philippines - The Romero group has offered to buy out the minority stake held by Metro Pacific Investments Corp. (MPIC) in Manila North Harbour Port Inc. (MNHPI), their joint venture company created to rehabilitate and operate the North Harbor.

Highly placed sources said the Romero-owned Harbour Center Port Terminal Inc. (HCPTI), which owns a controlling 65 percent stake in MNHPI, has made a firm offer to acquire MPIC’s 35 percent stake for P350 million. This was after MPIC failed to convince the Romero group to give it a majority control of the venture.

“After a series of negotiations, the Romero family has decided to buy out the shares held by MPIC,” a source privy to the negotiations said. The P350 million offer come from internally-generated funds.

The same source said MPIC was about to agree to the offer of HCPTI but decided at the last minute to first consult with the Philippine Ports Authority (PPA), which granted to the MPIC-HCPTI joint venture the P14.5-billion contract for North Harbor.

According to the terms of reference of the contract with PPA, any changes, including one involving equity ownership, have to be referred to the agency.

The P350 million corresponds to the amount MPIC has already spent for its participation in the North Harbor project.

MNHPI president Michael Romero earlier said giving majority control to MPIC will be against their commitment to modernize the dilapidated North Harbor port which is the principal concern of Harbour Centre to the public.

Romero emphasized that their family has been in the ports operation business for more than a decade.

He explained that there might be some technicalities as far as MNHPI being majority owned by MPIC, since Harbour Centre has the knowledge and experience on port operations.

For his part, MPIC chairman Manuel Pangilinan has said they only have two options: either they acquire control of MNHPI or just step out of the picture.

PPA general manager Oscar Sevilla has said HCPTI will have to look for another investor since the contract requires that the operator should have at least two member-firms.

“Though it requires [PPA] approval, there is no problem with us if [the new members of the consortium] are willing to come up with P14.5 billion altogether,” Sevilla added.

MPIC president Jose Ma. Lim was earlier quoted as saying that both parties are working towards the resolution of the issue at hand and are hoping an agreement will be reached in the next few weeks.

Lim said MPIC is waiting for the PPA’s action on the matter, pointing out that any change in ownership of MNHPI would require the government’s approval. “We hope to set a meeting with them (PPA) soon,” he said.

The creation of a joint venture company was one of the requirements set by the PPA as part of the Manila North Harbor contract.