Metro Pacific Investments Corp. offers to buy tollroad for P12.2-B

The Lopez-controlled holding firms, First Philippine Holdings and Benpres, will sell their stake in the North Luzon Expressway (NLEX).

In a late disclosure to the stock exchange on Thursday, First Philippine Holdings said Metro Pacific Investments Corporation, the local unit of Hong Kong-based conglomerate First Pacific Co. Ltd., has offered to buy the toll road business for P12.2 billion.

The concerned parties are currently negotiating a possible share purchase agreement, which is up for completion by November this year.

The interests of First Holdings and Benpres in the toll road business are held through First Philippine Infrastructure, Inc. (FPII) or formerly known as City Resources Corp.

Macquarie Capital (Singapore) Pte. Ltd. acted as exclusive financial adviser to Benpres and First Holdings.

FPII owns 100 percent of First Philippine Infrastructure Development Corporation (FPIDC), which in turn owns 67.1 percent of Manila North Tollways Corp. (MNTC) and 46 percent of the Tollways Management Corp. (TMC).  Through a Supplemental Toll Operation Agreement, MNTC was granted concession to finance, design, construct, operate and maintain the North Luzon Expressway (NLEX). TMC, its associate, operates and maintains the NLEX.

Once the sale has been finalized, First Holdings will receive P6.2 billion in proceeds.
 
"The Lopezes really need to bolster their war chest so it can pay down its debt given tightening credit markets," Conrado Bate, president of brokerage firm Citiseconline said.

AB Capital Securities research chief Jovis Vistan for his part said, MPIC's investment in a volatile market environment reflects the company's strong growth potential.

"It's a case of MPIC taking advantage of the depressed asset values for now given bearish market fundamentals. This is a good deal for MPIC because it is taking over a business already producing significant cash flows," Vistan said.

With the acquisition, Metro Pacific Investments Corp.'s interests now spread across healthcare, water management and toll roads operations.

MPIC operates the Makati Medical Center and Cardinal Santos Medical Center. It is also water management through Maynilad Water Services Inc., which holds the franchise to operate Metro Manila's west zone.

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