$1-B Indonesia toll roads enter MVP-RSA mega merger talks

Manuel V. Pangilinan                                                                                             Ramon S. Ang

The key to fully realizing the value of the mega tollways merger of tycoons Ramon S. Ang and Manuel V. Pangilinan appears to rest thousands of kilometers away in Indonesia, where the latter’s Metro Pacific Tollways Corp. (MPTC) controls a growing expressway portfolio worth about P56 billion.

As MPTC and Ang’s San Miguel Corp. (SMC) go deeper into the comprehensive valuation of their extensive assets, the inclusion of the Indonesian toll road business becomes a critical point of negotiations, MPTC president Rogelio Singson said.

“The valuation depends on whether SMC accepts us bringing in the Indonesia operations or not. The size of our Indonesia operations alone is $1 billion,” Singson told the Inquirer in a recent interview.

Major IPO

“I’m sure they will appreciate the investment in Indonesia,” he added.

The groups are tallying their assets ahead of a major initial public offering (IPO) in 2025. The IPO was pushed back amid merger plans that came to light after Ang, the president of SMC, made a personal investment in MPTC’s parent firm, Metro Pacific Investments Corp., whose major shareholders are Indonesia’s Salim family and the Ty family’s GT Capital Holdings.

“As far as we are concerned, we were hoping to have done the valuation and IPO by this year but the merger will push this back to 2025,” Singson said.

While both Metro Pacific and SMC bring considerable assets to the table, he said one of the groups will need to take the lead.

“Somebody has to be in the driver’s seat or it doesn’t work. Who? We don’t know. That depends on the valuation,” Singson said.

Trans-Java

There was another reason for MPTC to push hard for an IPO and this again involved its Indonesian business.

The toll road giant, whose Philippine portfolio spans over 300-kilometers and includes the North Luzon Expressway, Subic Clark Tarlac Expressway and Cebu-Cordova Link Expressway, is awaiting the upcoming results of the auction of a roughly 700-kilometer portion of the Trans-Java project.

Bagging this toll road project would mean the Indonesian operations will overtake the Philippines in terms of scale. “If we get this then we will definitely be bigger in Indonesia. Just to have an appreciation of that [700-km] distance that’s from Batangas port all the way to Pagudpud in Ilocos Norte,” Singson explained.

“That’s why we’re doing the IPO. We need the equity infusion,” he said.

MPTC also owns stakes in PT Nusantara Infrastructure Tbk in Indonesia and CII Bridges and Roads Investment Joint Stock Co. in Vietnam.

SMC’s tollroads include the South Luzon Expressway, Metro Manila Skyway system, Naia Expressway, STAR tollway and Tarlac Pangasinan La Union Expressway. INQ