The Metro Pacific group of businessman Manuel V. Pangilinan has expanded its Philippine tollroad portfolio with a P6.77-billion investment in the holding firm that controls the 14-kilometer Manila-Cavite Toll Expressway (Cavitex).
In a disclosure to the Philippine Stock Exchange Thursday, the infrastructure holding firm Metro Pacific Investments Corp. announced the financing and cooperation agreement between its tollroad subsidiary Metro Pacific Tollways Corp. and Cavitex Holdings Inc. (CHI), formerly Coastal Road Corp.
Under the agreement, CHI will issue a convertible note to MPTC which will give Pangilinan’s group the option to convert in the future new, non-voting redeemable convertible preference shares in CHI or common shares of Cavitex Infrastructure Corp., formerly UEM-Mara Philippines Corp.
However, the option to buy into Cavitex Infrastructure, which holds the concession for the operation and maintenance of Cavitex tollroad, is subject to certain approvals and conditions.
Under the cooperation agreement, MPTC will provide management assistance to CIC starting Jan. 2.
CHI believes that MPTC will be able to use its expertise in operating the North Luzon Expressway (NLEx) and Subic-Clark-Tarlac Expressway (SCTEx) to improve the services of Cavitex.
“We are looking forward to delivering to motorists on the Cavitex the same standard of customer service and excellence that MPTC already provides on the NLEx and the SCTEx,” MPTC chief executive officer Ramoncito Fernande said.
Cavitex tollroad runs from Cavite to Laguna and currently serves 90,000 vehicles a day.
“The proceeds from this financing will be used by CHI to invest in the Aquino administration’s PPP (public-private partnership) projects, as well as future real estate projects with the Philippine Reclamation Authority,” said CHI chair Luis Virata.
For his part, Pangilinan said that with the agreement, “MPTC will be able to assist in the future development of Cavitex and possibly adjoining roads in this rapidly growing part of Metro Manila.”
MPIC president Jose Ma. Lim described the agreement as another significant step “in our long signaled determination to further expand and develop Metro Manila’s tollroads.”