MPIC borrows P20B for bridge construction

CEBU, Philippines - Metro Pacific Investments Corp. (MPIC) has confirmed the borrowing of P20 billion this year to fund the construction of its Cebu-Cordova Link Expressway (CCLEx).

The company confirmed this in a stock exchange filing. 

The amount is higher from P17 billion previously reported.  MPIC's tollways arm Metro Pacific Tollways Corp. (MPTC) will start to work on the 8.25-kilometer Cebu-Cordova toll bridge by July and is targeted to be completed by December 2020.

MPTC President Rodrigo Franco earlier said in reports that MPIC could also tap the debt market though bank loans for P20 billion between June and July for the Cebu-Cordova project 

He said fund-raising for the Cebu project will depend on the final project cost but it's pegged at approximately P20 billion.

The infrastructure conglomerate has tapped Maybank as the arranger.

MPIC had said the Cebu toll bridge project will be funded through a combination of debt, internal cash and equity.

"Furthermore, the viability of these projects will in large part be subject to the immediate and satisfactory resolution of the pending tariff issues with the government," MPIC also noted.

Cebu is deemed as an expansion area for MPIC's tollways business given its continued economic development and potential of its healthy car ownership profile.

The 8.25-kilometer toll bridge will connect Cebu City to Mactan Island via Cordova, envisioned to decongest the traffic in the two existing bridges (Marcelo Fernan Bridge and Mandaue Bridge) between Mactan and Cebu, due to the worsening traffic situation in the area. It is located around 7.5 kilometers south of Mandaue Bridge and will take off from the Cebu South Coastal Road crossing the Mactan channel to Mactan Island.

This year MPIC has set a P79-billion capital expenditure budget from P40.5 billion last year. Of the total spending budget, P22 billion-P24 billion will be spent for the construction of more toll roads.

In 2016, MPIC reported a core net income of P12.1 billion, up 17 percent from the P10.3 billion posted in 2015, attributed to robust traffic growth on its toll roads; expanded power portfolio; continuing growth in the hospital business; first full-year contribution from its rail operations; and profitable entry into the logistics business.

MPIC's toll roads business accounted for P3.5 billion or 23 percent of  its net operating income.

MPIC — which has investments in water utilities, toll roads, electricity distribution, healthcare services and light rail — is one of the three key Philippine units of Hong Kong-based First Pacific Co. Ltd. aside from Philex Mining Corp. and PLDT, Inc.

Shares of MPIC were trading at P6.25 apiece in afternoon yesterday. (FREEMAN)