Smart, Globe to invest in single-ticket consortium

MANILA, Philippines - Rivals Smart Communications Inc. and Globe Telecom Inc. are infusing P160 million each in fresh equity to a consortium led by Metro Pacific Investments Corp. (MPIC) and Ayala Corp. for the P1.7 billion automated fare collection system (AFCS).

Smart, the wireless arm of dominant carrier Philippine Long Distance Telephone Co. (PLDT), is infusing an additional P160 million for its 20 percent stake in AFCSI.

Likewise, the Ayala-led Globe is also infusing the same amount representing its 20 percent interest in the special purpose company.

The additional equity infusion from both Smart and Globe is a result of the additional capital infusion amounting to P800 million approved by the Board of Directors of AFCSI last Jan. 20 to fund the completion of the AFCS project before September.

Shareholders should pay in proportion to their share subscriptions in AFCSI on or before March 31.

Smart has a 20 percent in AFCSI after it subscribed to 503 million shares at P1 per share. Of the total subscription price, Smart has paid P300 million but has yet to pay the remaining balance of P203 million.

With the additional capital infusion, Smart said its investments in AFCSI would amount to P289 million, net of subscription payable of P203 million as of end-December.

On the other hand, Globe has invested a total of P300 million in the consortium with 20 percent equivalent equity interest.

The MPIC-Ayala led AF Consortium bagged a 10-year contract from the Department of Transportation and Communications (DOTC) to undertake the P1.7 billion AFCS project in Jan. 2013. The consortium signed a concession agreement with the DOTC in June 2013.

The consortium is composed of AC Infrastructure Holdings Corp., BPI Card Finance Corp., and Globe Telecoms Inc., for the Ayala Group, and MPIC, Meralco Financial Services Corp., and Smart for the MPIC Group.

The PPP project involves the decommissioning of the old-magnetic-based ticketing system and replacing the same with contactless-based smart card technology on MRT-3 as well as LRT-1 and LRT-2 with the introduction of a centralized back office that will perform apportionment of revenues.