Screengrab from https://www.mpic.com.ph/site/
INFRASTRUCTURE holding firm Metro Pacific Investments Corp. has raised $200 million in fresh funds for expansion through an overnight equity private placement deal.
The “top up” deal was priced at P4.90 per share or at a 6.5 percent discount to Monday’s closing price of P5.24 per share and at a 2.75 percent discount to the volume-weighted average in the last 30 days, based on MPIC’s disclosure to the Philippine Stock Exchange on Tuesday.
The overnight deal was arranged by investment bank UBS. About 1.81 billion common shares were placed out to new investors in this fund-raising deal.
In its disclosure, MPIC said proceeds from this equity transaction – together with up to P10 billion of new borrowings – will be used primarily to pare down “relatively expensive” debt at MPIC’s affiliate Beacon Electric Asset Holdings Inc., the holding firm for the First Pacific group’s interest in utility Manila Electric Co. About P5.1 billion of the proceeds will be for this debt refinancing.
“The reduction in borrowings at Beacon is being done (and is anticipated) to increase cash flow to MPIC itself,” the disclosure added.
Another P2 billion has been earmarked for an investment in the rail business and P1.6 billion for the expansion of the toll business.
People privy to the deal said the transaction was “oversubscribed” and “supported by demand from international “long-only” funds and domestic investors, including existing shareholders of the company.
Under the “top-up” structure, the controlling shareholder group under First Pacific Co. Ltd. under the entity Metro Pacific Holdings Inc. (MPHI) lent some of its shares for sale to new investors for a quicker equity deal but it will subscribe to the same number of shares at the same price, allowing new money to flow into the company.
“The conduct of an equity fund raising through the placing and subscription transaction allows MPIC to raise equity funds in a most expeditious and efficient manner, with the least cost to MPIC, for use in its debt repayments, expansion and acquisition projects,” the company said in its disclosure.
“The transaction is also intended to strengthen and broaden the capital base of MPIC, as well as to promote a wider dispersion of the common shares of MPIC to a broad spectrum of public institutional investors,” it added.
After the transaction, MPHI’s interest in the infrastructure holding firm will be reduced from 55.76 percent of MPIC’s current outstanding common shares to 52.13 percent.