Megawide-led consortium, banks sign P23.3-B loan

A megawide-led consortium has raised P23.3 billion from a 15-year syndicated loan facility to fund the redevelopment of the Mactan-Cebu International Airport, the country’s second busiest gateway, under a public-private partnership (PPP) framework.

In a disclosure to the Philippine Stock Exchange on Friday, Megawide Construction Corp. said that GMR Megawide Cebu Airport Corp. (GMCAC), its joint venture with the GMR group of India, had entered into an omnibus loan and security agreement with six banks—BDO Unibank Inc., Bank of the Philippine Islands, Development Bank of the Philippines, Land Bank of the Philippines, Metrobank and Philippine National Bank.

Megawide, GMR Infrastructure Ltd. and GMR Infrastructure (Singapore) Pte. Ltd. were the sponsors and pledgors. BDO Capital and Investment Corp. was the lead arranger while BDO Unibank-Trust and Investments Group was the facility agent and security trustee.

The disclosure did not say how much the loan size was but two banking sources involved in the transaction said it was a P23.3-billion syndicated loan facility with a 15-year term. The proceeds will cover 70 percent of the total project cost while the remaining 30 percent will be covered by equity.

In a statement, Megawide said that with this transaction, GMCAC had tied in the required funding for delivering improvements in the airport’s terminal 1 as well as the new terminal 2. “Hence, this is an important milestone in GMCAC’s journey in turning MCIA into an airport of international standards and one that all Filipinos will be proud of,” the disclosure said.

“This transaction, and the wide participation in it, is also a validation by the banking industry of the financial sustainability of the project as well as the value it creates for the local and national economy,” it added.

The Department of Transportation and Communications awarded the Cebu airport PPP to Megawide in April this year after a hotly contested bidding process.

The project involves the construction of a new world-class passenger terminal building in MCIA, with a capacity of about eight million passengers a year, and the operation of the old and new facilities. The construction of a new passenger terminal, including all related facilities, is proposed to cater to domestic and international operations.

The Mactan-Cebu airport has an annual capacity of 4.5 million passengers, but it handled close to seven million passengers in 2013.