MANILA, Philippines — A Japanese joint venture is set to take a 6.6-percent stake in Metro Pacific Tollways Corp. (MPTC) as part of a P12-billion deal with conglomerate Metro Pacific Investments Corp. (MPIC).
MPIC last week entered into a framework agreement with Mit-Pacific, a joint venture between Mitsui & Co. Ltd. and Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development, for a proposed share buyback and issuance of exchangeable bond.
Under the agreement, MPIC will buy back 4.58 million common shares representing 50 percent of the common shares held by Mit-Pacific, or approximately 7.3 percent of the total outstanding common shares of MPIC.
The transaction will reduce Mit-Pacific’s interest in MPIC to 7.8 percent from the current 14.5 percent.
MPIC will also be issuing an exchangeable bond to Mit-Pacific for a total subscription price of P11.9 billion.
Hong Kong-based investment holding company First Pacific Co. Ltd. said the subscription price was “based on arm’s length negotiations between the parties with reference to the agreed valuation of MPTC, taking into account the status of the existing businesses carried out by MPTC and the assets held by MPTC.”
The bond will be exchangeable for 1.495 million common shares of MPTC held by MPIC, which represent approximately 6.6-percent economic interest in the tollways company.
MPTC is currently a 99.9 percent owned subsidiary of MPIC. It operates the North Luzon Expressway, Subic-Clark-Tarlac Expressway, Manila-Cavite Expressway, Cavite-Laguna Expressway and Cebu-Cordova Link Expressway in the Philippines and is also the majority shareholder in PT Nusantara Infrastructure Tbk in Indonesia and CII Bridges and Roads Investment Joint Stock Company in Vietnam.
Upon exercise of the exchange right attaching to the exchangeable bond by Mit-Pacific in full, MPIC’s resulting economic interest in MPTC will be reduced to about 93.3 percent.
An agreement in respect of governance matters relating to MPTC will be entered into by MPIC and Mit-Pacific.
Mit-Pacific will be entitled to one seat on the board of directors of MPTC. The director nominated by Mit-Pacific will be able to vote in board meetings, including board-reserved matters.
The transaction is expected to deepen strategic cooperation between MPIC and Mit-Pacific at the operational level while maintaining collaboration across the group.
“Toll roads represent one of multiple sectors across MPIC’s portfolio where Mitsui has the global network and key industry relationships to support the group’s long-term growth strategies,” First Pacific said.