A significant restructuring is underway at Metro Pacific Investments Corp., driven by a need to fortify its financial standing ahead of a potential merger with San Miguel Corp. and the possibility of a public offering.
At the heart of this strategic shift lies Metro Pacific Tollways Corp., the company’s tollway unit, burdened by a substantial P200 billion debt. Chairman and CEO Manuel V. Pangilinan revealed a renewed focus on reducing this debt, signaling a pivotal moment for the organization.
The plan involves attracting new investment through private placements, aiming to offload between 20% and 30% of stakes in both Metro Pacific Tollways Corp. and its Indonesian counterpart, PT Metro Pacific Tollways Indonesia Services. The search is on for a partner with proven expertise in tollway operations.
Earlier attempts to divest a portion of the tollway unit were paused, despite reported interest from Mitsui & Co. Ltd. This pause underscored the importance of finding the *right* investor, one aligned with long-term strategic goals.
A recent major investment – a $1 billion deal with Singapore’s GIC Pte. Ltd. for a 35% stake in Indonesian toll road operator PT Jasamarga Transjawa Tol – is expected to generate P30 billion in annual revenue. This influx is crucial for balancing assets and strengthening the company’s position for potential negotiations with San Miguel.
The Trans-Java Toll Road, managed by Jasamarga, is a vital artery for Indonesia, handling between 700,000 and 800,000 vehicles each day. Its contribution will be instrumental in bolstering MPTC’s financial profile.
Expansion plans are currently on hold, with the immediate priority being debt reduction and balance sheet strengthening. Pangilinan emphasized the need for a solid financial foundation before engaging in serious merger talks or considering further expansion.
To further address its financial obligations, Metro Pacific Tollways Corp. has secured approval to offer P15 billion in fixed-rate bonds, with a potential to raise an additional P5 billion. This capital will be directed towards ongoing infrastructure projects and debt refinancing.
The bond offering will specifically support the continued development and upkeep of key expressways, including the Manila-Cavite Expressway, Cavite-Laguna Expressway, and Lapu-Lapu Expressway, ensuring these vital transportation links remain modern and efficient.
Metro Pacific Investments Corp. operates as a key subsidiary of First Pacific Co. Ltd., alongside significant holdings in mining and telecommunications, representing a substantial force in the Philippine economy.
