MPIC builds up P25-B war chest for investment

Infrastructure holding firm Metro Pacific Investments Corp. has built up a war chest of P25 billion, which it is raring to invest in new acquisitions and the expansion of existing projects.

“We’re well-placed for all of these expansion projects and these PPP (public-private partnership) projects that we’re bidding for,” MPIC president Jose Ma. Lim told reporters after the company’s special stockholders’ meeting yesterday.

The P25-billion cash hoard was built by MPIC from its share in the proceeds from the sale of a portion of Maynilad Water Services Inc. to Marubeni of Japan, the equity deal conducted in January and some credit facilities. “It’s quite a substantial amount that we will have to invest first before we will have any (new) equity or other fund-raising (activity),” he said.

The special stockholders’ meeting was conducted to approve the listing of new shares issued by the company as part of a P6.12-billion equity placement last January.

Lim said the “P25 billion is the available funding for new projects, including existing expansion projects. It does not account the amount of debt in the operating companies like Maynilad or MNTC (Manila North Tollways Corp.). It is only the share of MPIC and we’re assuming our share is 60-70 percent, not 100 percent (in each project).”

This war chest would include funding for tollway projects, including the Harbor Link and the North Luzon-South Luzon Expressway connector road, Lim said.

The MPIC group is also beefing up its water utility portfolio both within and outside the franchise of operating unit Maynilad. For instance, the group recently acquired a 10-percent interest in Subic Water. “We intend to raise our stake in Subic (Water) to at least 50 percent, maybe 70 percent, if the government is inclined to sell its remaining shares,” Lim said.

It was earlier reported that MPIC’s partner in Maynilad, Consunji-led DMCI Holdings, was willing to sell its 40-percent stake in Subic Water to MPIC to allow the consolidation of control in MPIC.

At the same time, Lim said MPIC has an interest in bulk water supplier Philippine Hydro Inc., which would require additional investment for network expansion.

For the hospital business, the group has earmarked up to P3.5 billion for new acquisitions and a prospective increase in ownership in the existing hospitals under its network. The budget calls for the acquisition of four new hospitals with 200 or less beds in operation, adding to the group’s existing hospital portfolio of 2,000 beds.

The budget includes the seed capital for a potential venture into railway and airport infrastructure development, including the Mactan International Airport Terminal and the Ninoy Aquino International Terminal upgrading under the PPP framework. “It looks like Mactan and the Naia (projects) are going to move quickly, I don’t see any significant delays in these two,” he said.

On overseas investments, Lim said these would likely be led by the group’s parent firm First Pacific Co. Ltd. of Hong Kong. “Our role is to support in water or tollways,” he said.

With regards to the power plant project acquired by the group in Singapore, Lim said power distribution unit Manila Electric Co. would have sufficient cash reserves to fund its share of investments.

“In the case of MPIC, we will let them take the lead and we will be assisting them by way of technical agreements,” he said.