Conglomerate San Miguel Corp., which expects to become an infrastructure-driven enterprise by 2020, has incorporated a new subsidiary to hold its controlling interest in the planned P73-billion Metro Railway Transit Line (MRT-7) that will link Metro Manila to Bulacan.
The Securities and Exchange Commission has approved the articles of incorporation of the new subsidiary called SMC Mass Rail Transit 7 Inc.
Based on a document from the SEC, the primary purpose of the new entity would be “to engage in and carry on a development and contracting business involving railways and railroads; intermodal transport terminals; tollways, its facilities, interchanges, roads, highways, bridges, tunnels, waterworks, water utilities and systems; infrastructure works and other related public works; and all iron steel work, mechanical and electrical, and earth construction and excavation and related works, including operation and maintenance thereof; and the acquisition, lease, occupation, use of development of real property, and such other activities incidental to the foregoing.”
The move gives the SMC the leeway to raise project financing at the operating unit level.
Part of the secondary purpose of the new subsidiary is to “borrow such sums of money from no more than 19 lenders.” This means it will have the capability to tap quick sources of funding like an offering of corporate notes.
The new subsidiary will be able to execute, issue and dispose of promissory notes, bonds, debentures certificates and other negotiable or transferrable instruments or securities.
SMC Mass Rail has been allowed to exist for the next 50 years.
The group has secured financing for MRT-7 which will pave the way for the completion of the elevated train project by 2019. The MRT-7 concession is currently held by SMC through Universal LRT Corp.
MRT-7 is a mainly elevated train that runs 22.8 kilometers, linking Quezon City in Metro Manila and San Jose, Bulacan. The Hyundai Rotem-EEI consortium was named project contractor.