Aboitiz to sell P12B in bonds to help fund Cebu airport takeover

The Aboitiz Group is preparing to launch a P12-billion bond sale in the fourth quarter to help finance the acquisition of the operator of the Mactan Cebu International Airport (MCIA), the country’s second-busiest gateway.

The flagship conglomerate of the Aboitiz family, Aboitiz Equity Ventures Inc., said in a stock exchange filing on Tuesday it had sought the approval of the Securities and Exchange Commission to issue the bonds.

Proceeds will be used by subsidiary, Aboitiz InfraCapital, in its planned P25-billion takeover of the Cebu Airport from tycoon Edgar Saavedra’s Megawide Construction Corp. and India’s GMR Infrastructure.

Aboitiz, one of the country’s biggest companies with businesses spanning power, banking, food, property and infrastructure, also plans to use proceeds to repay certain outstanding obligations.

“Subject to market conditions, the 2022 bonds are expected to be offered to the general public during the fourth quarter of 2022,” Aboitiz said in the filing.

The Cebu airport concession is controlled by GMR Megawide Cebu Airport Corp. (GMCAC), which redeveloped the MCIA and turned it into a world-class gateway after winning the Public Private Partnership project in 2014.

Megawide-GMR’s aggressive bid bested some of the country’s top conglomerates, including Aboitiz and partner, Ayala Corp.

Some of the losing conglomerates went on to pursue other airport projects.

Among them, San Miguel Corp., which is building a P740-billion gateway in Bulacan, and the venture led by JG Summit Holdings and the Filinvest Group, which bagged the concession for the Clark International Airport in Pampanga.

Aboitiz announced plans to acquire the Cebu Airport project early this month.

It would pay P9.5 billion to acquire a third of the operator and another P15.5 billion to buy convertible notes, allowing the group to gain full control of the Cebu airport venture by October 2024, a previous filing showed.

Megawide, a leading construction and infrastructure group, said it would continue to invest in infrastructure.

It owns the concession for the Parañaque Integrated Terminal Exchange (PITX) and won contracts to build part of the Malolos-Clark Railway Project and the Metro Manila Subway System Project.

Megawide said it was also exploring a number of “transport-centric development locations to complement its hub-and-spoke model” in the PITX and Carbon Market Redevelopment in Cebu.