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SMC, Citra plan infra joint venture

$1-B fund for toll roads in PH, Indonesia

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CONGLOMERATE San Miguel Corp. and Jakarta-based Citra Group is building up a war chest worth $1 billion for infrastructure projects in the Philippines and Indonesia, with the aim of becoming Southeast Asia’s biggest toll road player.

At a briefing Friday, Citra Group chair Shadik Wahono said the company planned to form a joint venture with San Miguel that would eventually go public, either through an initial public offering (IPO) in the Philippines or through the issuance of toll road asset-backed securities called Business Trusts in Singapore.

The new holding firm, which has yet to be named, will handle both groups’ extensive toll road assets in Indonesia and the Philippines.

“The consortium’s balanced mix of revenue-producing mature assets and strong development projects gives bright prospects for its future,” Wahono said. “Its focus on toll road infrastructure in the Philippines and Indonesia—with their large population base, strong economic growth and developing car cultures—positions the consortium to be a dynamic and significant force in infrastructure in Southeast Asia.”

San Miguel and Padma Funds LP., a Cayman Islands-based private equity firm that owns the Citra Group, control Citra Metro Manila Tollways Corp. and South Luzon Tollways Corp. The two toll road firms hold the concessions for the Metro Manila Skyway and South Luzon Expressway (SLEx), respectively. Revenue of both toll roads is expected to reach $266 million in 2012, up   12 percent year-on-year.

On its own, San Miguel also holds concessions in the $250-millon North Luzon East Expressway and the $390-million Tarlac-Pangasinan-La Union Expressway projects. Padma, through Citra, owns and operates 70 kilometers of toll roads in Jakarta and Surabaya, Indonesia’s second-largest city next to the capital, handling 600,000 vehicles a day.

San Miguel and Padma plan to put up a new holding firm for existing and future assets of both groups. The public listing would likely take place after the first quarter of 2013, Wahono said, adding that the company might sell $200 million worth of new shares initially. A follow-on offering two or three years down the line of roughly the same amount might also be done.

He said the company had the option of raising $700 million to $1 billion in one move by tapping the Singapore market, which has more liquidity. He said with interest rates in the region at record lows, “any instrument that pays out 7-8 percent a year will make investors used to fixed-income assets very happy.”

In the Philippines, the group hopes to develop the Skyway Stage 3 and 4, worth $590 million and $670 million, respectively; SLEx phase 4 worth $230 million and potentially the widening of the Southern Tagalog Arterial Road (Star), which the group intended to acquire before yearend. Skyway stage 3 will link the elevated highway to North Luzon Expressway (NLEx) while stage 4 will stretch from Buendia to Bulacan. SLEx phase 4 is a 57-kilometer road from Batangas to Lucena, Quezon.


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Tags: Business , citra , Infrastructure , joint venture , roads , SMC

  • http://twitter.com/jayrvice j ludovice

    I hope SLEx extension to Lucena City will finally push through…traffic along Maharlika Highway particularly in San Pablo City and Alaminos is causing much delay….. Not good for business in the area

  • http://twitter.com/jayrvice j ludovice

    We have been waiting for the slex extension to lucena city….for so long

  • efriend

    Just build it.  Now na.

  • help_our_country

    Its a good news for all southerners.The travelling time from Lucena going to Manila & vice-versa will be shortened.Traffic congestion will lessen from Sto.Tomas to San Pablo City.

  • http://pulse.yahoo.com/_QSBNZB3TEKHJE5A74STZTTUHC4 ed0408

    It is important that the gov’t. should have at least 40% share of this companies who provide services (like Singapore) so that citizens can also benefit from the profits earned by this companies.



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