Infrastructure holding firm Metro Pacific Investments Corp. (MPIC) is setting aside P5 billion to buy back shares from the local stock market, where its share prices have taken a heavy beating in the last five years.
“The purpose for the share buyback program is to enhance and improve shareholder value and to manifest confidence in the company’s value and prospects through the repurchase of its common shares,” MPIC said in a disclosure to the Philippine Stock Exchange on Wednesday following the approval from its board.
The disclosure said the company’s buyback transactions would be triggered in cases whereby the company’s stock would be deemed substantially undervalued and during high volatility in share prices. The buyback will also be exercised in other instances, where such activity would improve shareholder value.
MPIC’s stock price rose by 2.5 percent on Wednesday to close at P3.69 per share, giving it a market capitalization of P108.25 billion. It is trading about 15-percent lower than its 52-week high of P4.24 per share.
MPIC’s share has fallen by about 46.8 percent from its five-year peak of P6.94 per share. Back in 2017, MPIC was trading at the P6 to P7 price range, but regulatory challenges faced by its toll road and water utility businesses had dragged down prices since then.
Arbitration case
In 2018, Maynilad Water Services Inc. won an arbitration case filed in Singapore, where it sought compensation for losses from the Metropolitan Waterworks and Sewerage System’s refusal to implement tariff adjustments for the period 2013 to 2017.
It eventually had to give up its claims and sign a new concession agreement after President Duterte sought the removal of what he claimed as “onerous” provisions.
Tariff issues likewise hounded its toll road businesses in previous years.
In a separate development, an offshore unit of MPIC’s toll road arm Metro Pacific Tollways Corp. (MPTC) has broken ground for a $53-million 3.2-kilometer new toll road in Indonesia, which is targeted to be completed by early 2023.
The Makassar New Port Access Toll Road project is undertaken by one of MPTC’s indirect subsidiaries in Indonesia, PT Bintaro Serpong Damai.