SMC gets option to raise stake in Skyway project to 51%

MANILA, Philippines - Food-to-infrastructure conglmerate San Miguel Corp. will take a 46 percent interest in a company that majority owns Citra Metro Manila Tollways Corp. , the developer of the Metro Manila Skyway project, with an option to increase its stake to a maximum of 51 percent at a later date.

In a disclosure to the stock exchange, San Miguel said its wholly-owned subsidiary San Miguel Holdings Corp. (SMHC) accepted the invitation of the Citra Group to invest in 46 percent of Atlantic Aurum Inc. the corporate vehicle of the Indonesian group and the concession holder of the Skyway project.

“Under the agreement, SMHC has a continuing option to acquire up to 51 percent of Atlantic at a later date”, San Miguel said.

The Skyway project is a modern elevated toll expressway intended to help decongest Metro Manila’s major road system and increase the area’s economic opportunities. It includes the rehabilitation of the South Luzon Expressway from Magallanes to Alabang.

Stage 1 of Skyway, consisting of the construction of the 9.53-kilometer elevated expressway from Buendia to Bicutan and the rehabilitation of the 13.5-kilometer at-grade level from Magallanes to Alabang, was completed on schedule and was made fully operational by July 1999. Stage 2, on the other hand, involved the construction of the 6.88-kilometer elevated expressway extension from Bicutan to Alabang which was completed last May.

The announcement followed the Citra Group’s pronouncement it was ready to infuse an additional $1.5 billion in tollroad projects in the Philippines, including Stages 3 and 4 of the Metro Manila Skyway project as well as planned acquisitions.

The Citra Group formed a new holding company, AAI, to own the shares of four Indonesian firms – Citra Marga Nusaphala Persada, Citra Lamtoro Gung Persada, Bhaskara Duniajaya and Matra Sarana Arsitama in CMMTC.

The group has submitted to the government a proposal to undertake Stage 3 of the Skyway project, reaffirming its confidence in the Philippine economy. It just completed Stage 2 ahead of schedule in March this year in partnership with the Philippine National Construction Corp.

The third stage, which will extend from Buendia to Balintawak, (connecting North Luzon Expressway ((NLEX) to the South Luzon Expressway (SLEX), covers about 13 kilometers. The project is estimated to cost around P24 billion.

The group, which has built its presence in the Philippines since 1995, has already raised the necessary funding to support the third and fourth phases of the Skyway project and new tollroad projects.

The fourth phase called Metro Manila Expressway, a component of the C6 Road, is a 57-km at-grade expressway that will link the Skyway System at FTI in the South with the North at San Jose del Monte. Passing through C6 in Taguig, Ortigas Avenue Extension, Marcos Highway, San Mateo and Montalban in Rizal province.

San Miguel earlier teamed up with tollroad operators Citra Lamtoro Gung Persada and Star Tollway Corp. to bid for the P1.96-billion Daang-Hari South Luzon Expressway link tollroad, a four-kilometer, four-lane paved toll road that will pass through the New Bilibid Prison reservation and connect the town of Bacoor in Cavite to the SLEX through Susana Heights in Muntinlupa.