SMC, Citra eye bond issue to bankroll P50-B road projects

MANILA, Philippines - The tandem of Citra Group of Indonesia and diversified conglomerate San Miguel Corp. (SMC) is looking at several fund raising  schemes to bankroll two road projects worth close to P50 billion.

Shadik Wahono, president of Citra Metro Manila Tollways Corp. (CMMTC), said in an interview with reporters that the company is considering issuing debt instruments such as bonds instead of undertaking an initial public offering (IPO).

Wahono said the company could offer debt instruments such as bonds to interested investors, particularly insurance companies to raise funds to finance the Metro Manila Skyway Stage 4 and the South Luzon Expressway (SLEX) Toll Road 4 projects.

Wahono said, insurance companies are keen on investing in long-term debt instruments with higher yield.

“Either they (insurance companies) want to go in through equity or other instrument that would give them higher rate such as fixed income,” Wahono said.

He pointed out that the company would spend as much as P15 billion for the TR4 project that would extend SLEX from Sto. Tomas in Batangas up to Lucena City in Quezon.

He added that around P35 billion would also be used for the Metro Manila Skyway Stage 4 project.

“If you sum up all these projects, the value of the IPO is small. But we have other alternatives,” he said.

In November 2012, Wahono said the tandem of Citra Group and SMC was looking at an IPO to raise much needed funds of between $700 million and $1 billion for various toll road projects in the Philippines and Indonesia.

Last Jan. 22, President Aquino led the launching of the P27-billion Metro Manila Skyway Stage 3 project connecting the North Luzon Expressway and the South Luzon Expressway of SMC’s Citra Central Expressway Corp.

The project involves the construction of a 14.8-kilometer six-lane elevated expressway that would connect the end of Skyway in Buendia, Makati City to Balintawak in Quezon City.

Aside from SMC, other partners in the concessionaire include Citra Lamtoro Gung Persada and the state-run Philippine National Construction Corp. (PNCC).

The company intends to construct a double-deck roadway along certain sections of the Stage 3 alignment from Plaza Dilao to N. Domingo in San Juan City and after Quezon Ave. up to the end of Bonifacio Blvd in Sgt Rivera.