MPIC sets stake sale

Infrastructure holding firm Metro Pacific Investments Corp. plans to sell a portion of its stake in the hospital and tollroad businesses to fund the group’s expansion program without incurring more debt in the coming years.

Over the next five years, for instance, tollroad unit Metro Pacific Tollways Corp. (MPTC) plans to spend P104.3 billion to add 84 kilometers of new tollroads to its network. Another P25 billion will be spent if MPTC bags the Cavite-Tagaytay-Batangas Expressway, for which original proponent status has been received.

For the water business, MetroPac Water Investments Corp. is in the process of implementing new projects that will expand the installed capacity of its water investment portfolio by up to 393 million liters per day (MLD) in the Philippines and 600 MLD in Vietnam. The group is also in the process of negotiating and awaiting final award for projects with installed capacity of 430 MLD around the Philippines.

For power, the group expects to begin commercial operation of the 455-megawatt San Buenaventura coal-fired power plant in Quezon in the third quarter of this year. Alsons Thermal Energy, which is 50-percent owned by Global Business Power (GBP), is also seen on track to start operation of its second 105-MW expansion plant in Sarangani by the second half of 2019.

“With regard to funding, management is committed to exploring various combinations of crystallizing value in some of our existing assets to raise funds for our expansion projects. The targeted asset selldown, together with maximum safe use of leverage, should see us through the next wave of growth we are pursuing,” MPIC president Jose Ma. Lim told stockholders in an annual meeting on Monday.

“What we’re first going to do is fund everything we have without increasing debt, and then we will work on reducing debt,” he added in a press chat after the meeting.

MPIC chair Manuel V. Pangilinan said the asset selldown would involve a partial divestment of MPIC’s stake in the hospital business and likewise getting a new strategic partner who will take up to 20 percent of MPTC.  Both strategic partners will likely be foreign, Pangilinan said.

MPTC currently operates and maintains 212 kilometers of expressways across three major Philippine tollroad systems while Metro Pacific Hospitals is the biggest hospital operator in the country with 14 hospitals, of which eight are in Metro Manila.

In 2014, a unit of Singapore’s sovereign wealth fund acquired a 40-percent stake in Metro Pacific Hospitals, while 60 percent remains with MPIC.