MPIC gets $200M for expansion, debt payment

Infrastructure holding firm Metro Pacific Investments Corp. (MPIC) has raised $200 million in fresh funds for expansion through an overnight equity private placement deal.

The “top up” deal was priced at P4.90 per share or a 6.5-percent discount to Monday’s closing price of P5.24 per share and a 2.75- percent discount to the volume-weighted average in the last 30 days, according to MPIC’s disclosure to the Philippine Stock Exchange on Tuesday.

The overnight deal was arranged by investment bank UBS. About 1.81 billion common shares were placed out to new investors in this fund-raising deal.

In its disclosure, MPIC said proceeds from the deal, together with up to P10 billion in new borrowings, would be used primarily to reduce a “relatively expensive” debt of MPIC affiliate Beacon Electric Asset Holdings Inc., the holding firm for First Pacific’s interest in Manila Electric Co. About P5.1 billion was earmarked for this.

Another P2 billion was earmarked for investment in the rail business and P1.6 billion for the expansion of the toll business.

UBS Philippines managing director Lauro Baja said the offering was “well oversubscribed,” with more than 50 investors participating in the deal.   Investors positioning for the long term account for 70 percent of the deal while hedge funds got 30 percent, he said.

In terms of geographical distribution, Baja said 70 percent of subscribers came from Asia while 30 percent came from the US and Europe. The top five investors accounted for more than 50 percent of the deal.

“There are a lot of new shareholders who came into the deal,” Baja said. He noted that MPIC’s opening price of P5.05 per share yesterday, while a discount to the previous day’s finish, marked a 3.1-percent premium to the placement price, noting this was a “good sign.”

Under the “top-up” structure, the controlling shareholder group under First Pacific Co. Ltd. under the entity Metro Pacific Holdings Inc. (MPHI) lent some of its shares for sale to new investors for a quicker equity deal but it would subscribe to the same number of shares at the same price, allowing new money to flow into the company.

First Pacific, a Hong Kong-based firm, is heavily invested in Philippine assets, particularly telecommunications, infrastructure and mining.

“The conduct of an equity fund raising through the placement and subscription transaction allows MPIC to raise equity funds in a most expeditious and efficient manner, with the least cost to MPIC, for use in its debt repayments, expansion and acquisition projects,” the company said in its disclosure.

“The transaction is also intended to strengthen and broaden the capital base of MPIC, as well as to promote a wider dispersion of the common shares to a broad spectrum of public institutional investors,” it added.