MVP unit in P6.8B Coastal Road deal

Virata firm to issue convertible bonds to MPTC

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This photo taken on Nov. 6, 2012, shows a portion of the Coastal Road being widened and improved. Businessman Manuel V. Pangilinan is set to make a significant improvement in the holding firm that owns the Coastal Road, a move that may give him control of the toll highway. RICK ALBERTO

Businessman Manuel V. Pangilinan is set to make a significant investment in the holding firm that owns the Coastal Road project connecting Metro Manila with the province of Cavite—a move that may eventually give the telecommunications tycoon control of the toll highway.

The deal is worth an estimated P6.8 billion and is slightly higher than the outstanding obligations of Cavitex Infrastructure Corp. (formerly UEM Mara Philippines Corp.), the operator of what is officially known as the Cavite Toll Expressway project.

Cavitex is headed by businessman Luis Virata, who started the project at the height of the 1990s economic boom in partnership with Malaysian conglomerate UEM Berhad. The project struggled to meet vehicular traffic forecasts since the outbreak of the East Asian financial crisis in 1997, but recently completed a major expansion project that saw the road extended to Kawit, Cavite, in 2011.

The Inquirer learned that the deal would involve the holding firm of the Coastal Road operator issuing convertible bonds to Pangilinan’s toll road firm, Metro Pacific Tollways Corp. The bonds will be convertible to non-voting preferred shares in the holding firm, but can also be redeemed by Cavitex.

“This is a bond, so Pangilinan’s group will basically be lending money to Coastal Road,” said a source who declined to be identified. “Ownership and day-to-day control of operations will remain with Virata’s group. Metro Pacific will provide management assistance, given their experience with other toll projects.”

The source said that Pangilinan and Virata agreed on the deal earlier this week, while the formal signing was set for next week. The agreement also comes more than three years after talks began between both camps for the Pangilinan group to invest in the Virata’s toll road project.

The new funds may be used to fund Cavitex’ further expansion to meet the growing volume of vehicular traffic moving between Metro Manila and its southern environs each day.

Once completed, Cavitex will have a total length of 21 kilometers and is expected to cut travel time between Manila and Cavite to 30 minutes. As many as 80,000 vehicles use Coastal Road on peak days.

Last April, the parent firm of the Coastal Road tollway operator sold 30 percent of its stocks to a group of foreign investors at the same time when it retired its pricey debt financing scheme. Coastal Road Corp. sold 30 percent of its stocks to Thornhedge Equity Investments, an investment company representing a group of New York-based private equity investors.

At that time, it was said that Thornhedge would participate directly in CRC’s reclamation and other infrastructure projects. Thornhedge was advised on this transaction by TAP Advisors, a New York boutique investment bank. CRC is the parent firm of Cavitex.

At the time of the deal, Cavitex Finance Corp., a Cayman Islands-registered special purpose company, projected that its profitability would improve significantly with the completion of its tender offer to purchase bonds issued by Manila Cavite Toll Road Finance Corp.

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  • pinoypower

    Wala na tayong kawala kay MVP. Lahat ng aspeto ng buhay natin kontrolado na niya. Kuryente, tubig, telepono, transportation, pagkain, health care at marami pang iba. Actually mas may control pa siya sa atin kesa sa presidente!!!

  • http://pulse.yahoo.com/_EK26UFQEC5KHVMK5N6KXIDVD2I yahoo-EK26UFQEC5KHVMK5N6KXIDVD2I

     Buti na lang dito kami sa Antipolo nakatira.  Walang tollway tollway at walang baha. Kung walang traffic, 30 mins travel time lang nasa The Fort, Makati, Ortigas at Cubao ka na.  1 fx ride lang or 1 jeep ride lang nasa metro manila ka na.  Sarap pa ng simoy ng hangin dito.

  • http://www.facebook.com/pages/Stop-Monopoly/134038403339475 88Cindy

    Naku po. Lahat na lang ng hawakan ni MVP ay nagiging ginto …. ang presyo.
    Siguradong maya’t maya na naman ang increase dyan.
    kawawa na naman ang mga consumers
    talaga bang wala nang katapusan ang kasakiman ng ilang tao?

  • chingnarciso

    kawawa  ang mga pinoy,magbabayad  ang yearly tax ng sasakyan,magbabayad taon taon ang regestrito ng sasakyan at mag babayad pa kapag dadaan sa hi-way. Nasaan ang mga perang kino kolekta ng mga gobyerno.?

    • http://profile.yahoo.com/AWZKW4NP3WKKSPDZMIXQXGRYYE Ann

      (Kawit to Paranaque Toll Plaza = P64.00) + (Paranaque Toll Plaza = P24.00) = P88.00 x 2 = P176.00 / day… hay, kamusta naman pag tumaas pa ulit yan?
      P88.00 one way for a 14km-stretch…ROI agad-agad! a few weeks after CAVITEX opened, ang dami agad sira ng daan. may area na madilim, walang ilaw. kamusta naman ang quality ng infra at quality ng service? mediocre ang term ng ‘convenience’ dito. ngayon lang halos naayos lahat (almost).
      nasaan na nga ba ulit yung tax na binabayaran namin for the annual car registration? pati nga car insurance, may tax pa din (VAT and Local Govt Tax). =(

  • noelpogi

    Delikado na naman ang mga taga Bacoor, Rosario, Kawit, Imus, Naic, tiyak na babahain kayo ng mataas kesa ngayon.

  • Pablo Juan

    Yey! Mahal na naman ang toll kagaya sa SLEX, NLEX and SCTEX!

    • WeAry_Bat

      Whatta move to capture the people fleeing Skyway and SLEX fees, by buying Coastal Road.

      Ano ba yung sinasabi ng iba…Where there is MVP, there is Price Increase.

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