SMC consolidates hold on key toll roads

Conglomerate San Miguel Corp. (SMC) is consolidating its control over the South Luzon Expressway and Skyway System—the two major toll roads serving the southern portion of Metro Manila and nearby provinces—after buying out most of the shares of Indonesia’s Citra Group.

SMC said in a stock exchange filing that wholly owned subsidiary San Miguel Holdings Corp. would increase its stake in Atlantic Aurum Investments B.V. to 95 percent, from the current 46.53 percent.

Atlantic Aurum Investments holds the concession rights to Skyway and SLEX.

SMC’s board decided to transfer Citra’s 48.47 percent stake in Atlantic Aurum to San Miguel Holdings for an undisclosed amount.

The disclosure suggested that Citra, the original Skyway concession holder, would continue to own 5 percent of Atlantic Aurum, which SMC agreed to enter in 2011.

In 2012, the two groups joined forces to acquire the SLEx concession from Malaysia’s MTD Group.

No other details were disclosed on how the current Atlantic Aurum transaction would be funded. But SMC said in a separate stock exchange filing that its board approved a plan to reissue and sell, via a private placement deal, about 300 million in series “1” preferred shares.

The conglomerate also did not reveal any other details. But an analyst said that, assuming the preferred shares carried the same P75 price at which they were redeemed in 2012, the shares could be valued at about P22.5 billion.

Jose Mari Lacson, head of research at stock brokerage firm Campos Lanuza and Co., said the funds would likely be used for SMC’s debt management and for spending purposes, including investments.

The consolidation of Skyway, which spans about 30-kilometers, including at-grade or street-level sections, and the 36-kilometer SLEx comes just as expansion plans for both toll roads have been drawn up.

SMC this week said it would set aside about P168 billion for new infrastructure projects in the next five years, a large part of which would go to expressway projects.

It will also build a 58-kilometer, four-lane SLEx expansion project that will link SLEx in Sto. Tomas, Batangas to Lucena, Quezon.

Last year, it started work on the 14.8-kilometer Skyway expansion project called Metro Manila Skyway Stage 3. The road will run from Buendia, Makati City, to Balintawak, Quezon City. Once completed, motorists’ travel time will be cut from more than an hour-and-a-half to about 15 minutes.

The SLEx expansion will be done by 2019 while the new Skyway project may be finished between 2016 and 2017, officials earlier said.

The company’s other tollroad assets include the Southern Tagalog Arterial Road Tollway and the Tarlac-Pangasinan-La Union Expressway, north of Metro Manila.

In 2014, SMC won the Naia Expressway PPP project. It hopes to finish by the third quarter of 2015. It is also bidding for new PPP projects like the P35.4-billion Cavite Laguna Expressway and the P122.8 billion Laguna Lakeshore Expressway-Dike.