The group of Manuel V. Pangilinan may make another bid for a controlling stake in the Manila-Cavite Toll Expressway Project, or the Coastal Road, that links Metro Manila to the Cavite Province.
A source from UEM Mara Philippines Corp., which holds the concession for Coastal Road, said the company’s controlling shareholders recently approached the Pangilinan group to invite the latter to invest.
Coastal Road is the last remaining toll road in the country not backed or owned by either the Pangilinan group or San Miguel Corp.
Metro Pacific Tollways Corp. (MPTC), chaired by Pangilinan, holds the concession for the North Luzon Expressway (NLEx). It also won recently the contract to operate the Subic-Clark-Tarlac Expressway (SCTEx).
In the meantime, San Miguel Corp., which has been diversifying outside its core food and beverage business, has interests in the Metro Manila Skyway, the South Luzon Expressway and the Southern Tagalog Arterial Road. It also holds the concession for the planned Tarlac-Pangasinan-La union Expressway.
The source, who requested anonymity because he was not authorized to speak on the matter, said UEM Mara approached the Pangilinan group because the latter had previously expressed interest in buying a stake in Coastal Road.
This comes amid UEM Mara’s current financial problems, stemming from an over-optimistic projection in traffic volume at the recently completed Coastal Road Cavite Extension.
The UEM Mara group earlier issued $160 million worth of bonds backed by the revenues from the new Cavite Extension, which opened in 2010.
The company earlier projected that about 47,000 passengers would pass through the new Cavite Extension, which was built on reclaimed land. However, daily passenger traffic at the new road only averaged about 10,000 cars in 2011.
Due to the lower-than-expected traffic, the toll revenue-backed bonds were downgraded to “junk” status by Moody’s Investor Service last year.
UEM Mara has offered to buy back the said bonds from investors at an “early redemption” premium of $30 for every $1,000 worth of securities. The tender offer period is ending by the end of this month.