MPIC eyes bigger stake in Thai firm

The group of businessman Manuel V. Pangilinan is keen on hiking its minority stake in the operator of a toll road in Bangkok, Thailand, as it seeks to diversify its presence outside the Philippines amid regulatory uncertainties, a top company official said.

David Nicol, chief financial officer of Metro Pacific Investments Corp., said that “an overseas push is indeed part of the strategy” after “disappointing” developments with Philippine regulators relating its water distribution and toll road businesses.

That opportunity came via Thailand’s Don Muang Tollway Public Company Ltd., which has a 27-year concession ending in 2034 to operate a 21.9-kilometer elevated toll road that runs from central Bankok to the northern part of the city.

Metro Pacific and parent firm First Pacific Co. Ltd. said Friday they formed joint venture FPM Infrastructure Holdings Ltd., split 75-25 between them, respectively, to acquire 29.45 percent of Don Muang Tollway for P5.8 billion.

The venture is Metro Pacific’s first direct investment overseas and the prospects of the Thai toll-road made it attractive enough for the group to want a bigger stake, Nicol said.

“We would consider increasing our holding if further shares were on offer although nothing is imminent,” Nicol said in a text message. He also noted that the group remained open to new investment opportunities in the Philippines.

Meanwhile, other major shareholders of Don Muang Tollway include the Phanichewa Group with 37.1 percent and Thailand’s Ministry of Finance with 25.1 percent.

“We think the business has a great management team. In particular, we like the concession as all future tariff increases are set—no regulatory approvals or delays—we just publish and change on the agreed upon dates,” he added.

Uncertainty over tariffs is an issue the company is dealing with.

For example, water regulator Metropolitan Waterworks and Sewerage System in Sept. rejected petitions for a rate hike by Metro Pacific’s Maynilad Water Services and the Ayala Group’s Manila Water Co. Inc. for their respective concession areas for the western and eastern part of Metro Manila.

MWSS also ordered a rate cut for both companies, prompting them to file arbitration cases abroad.

Approval for toll road adjustments is also overdue by a year and half for toll road operators.

Metro Pacific is seeking to adjust rates for North Luzon Expressway and for Manila Cavite Expressway.

“Of course, the MWSS matter and the ongoing toll rate increase delays in all the roads here (not just ours) are a little disappointing,” Nicol said.