MPIC raises stake in Thai tollroad operator

MANILA, Philippines–Infrastructure holding firm Metro Pacific Investments Inc. has raised its interest in Thai tollroad operator Don Muang Tollway Public Co. Ltd. (DMT) to 29.45 percent, from 7.36 percent, by buying out the indirect stake held by parent conglomerate First Pacific Co. Ltd.

In a statement on Friday, Hong Kong-based First Pacific announced that MPIC would buy its Thai tollroad investment for $101.25 million.

MPIC is unfazed by the political unrest in Thailand and is instead encouraged by the country’s investor-friendly regime, the company said.

“Thailand offers a level playing field and a regulatory regime that welcomes investment,” MPIC president Jose Ma. Lim said.

In contrast, he said, MPIC cannot obtain toll adjustments from Philippine regulators.

Lim sees no disruptions to DMT’s operations in Thailand’s current political climate.

“Although Thailand is experiencing some political uncertainties, we remain committed to seeking further investment opportunities there,” he said.

The transaction involves the sale of First Pacific’s 75-percent stake in FPM Infrastructure Holdings Ltd., the group’s holding firm for the Thai tollroad business. Prior to this deal, MPIC already owned 25 percent of FPM, thereby raising its interest to 100 percent. FPM Infrastructure’s sole asset is a 29.45-percent interest in DMT.

The Thai tollroad is MPIC’s first-ever investment outside the Philippines. The company plans more such offshore infrastructure investments, drawing from its business experience in the Philippines.

“MPIC has reached a stage of development where it is ready to take its infrastructure expertise regionally. We very much look forward to   seeing MPIC’s new focus on its regional infrastructure ambitions,” said Manuel V. Pangilinan, chair of the MPIC board and managing director and chief executive officer of First Pacific.

“We are very impressed with the quality of the DMT management. We are confident that the tariff increase due at end of this year will go ahead as planned,” Lim said.

Apart from tollroads, MPIC has interests in water and electricity distribution, and healthcare infrastructure in the country.

MPIC intends to fund the purchase from internal resources and borrowings and settle the transaction on July 31.

The transaction has been reviewed by MPIC’s audit and risk management committee (ARMC) in accordance with the ARMC charter and code of corporate governance.

Working under a 27-year concession ending in 2034, DMT operates a 21.9-kilometer six-lane elevated tollroad stretching from Din Daeng in central Bangkok past Don Muang Airport and on to the National Monument north of the capital.