MVP firm eyes 49% stake in MRT 3

MANILA, Philippines—Metro Pacific Investments Corp. is working on new deals to raise its interest in the Metro Railway Transit 3—Metro Manila’s busiest elevated railway running the stretch of Edsa—to at least 49 percent from 29 percent, Inquirer sources said Wednesday.

MPIC told the Philippine Stock Exchange Wednesday that it had entered into several agreements with some of the shareholders of Metro Rail Transit Corp., operator of the MRT 3, without saying how much stake it would end up with once the deals were closed.

Industry sources said 49 percent of MRTC shareholders have so far consented to assign their shares to MPIC. The first block of 29 percent ceded to MPIC was owned by the Fil-Estate group.

The state-owned Development Bank of the Philippines and Land Bank of the Philippines, the two government financial institutions that accumulated debt and equity paper equivalent to an economic interest of 80 percent of the MRT 3 business in 2009, have not sold their interest and thus still control 11 of 14 seats in the MRTC board, a government source said.

DBP and Landbank previously acquired direct equity in MRTC equivalent to 22.3 percent of common shares and likewise bought outstanding preferred shares that gave them the right to sit on the board and get the dividends from the MRT 3 operations. Apart from controlling the board, the government banks are now getting 80 percent of the economic interest in the form of equity rental payments.

The common shares eyed by MPIC, on the other hand, have been pledged to creditors as some shareholders of MRTC had previously borrowed using such shares as collateral. About 70 percent of MRTC’s common shares are thus under the custodianship of investment house PentaCapital.