DIVERSIFYING conglomerate San Miguel Corp. (SMC) will sign this morning a contract marking its official entry into the all-Filipino group building the multibillion-peso Tarlac-Pangasinan-La Union Expressway, according to an individual familiar with the matter.
The inking of the shareholder’s agreement is the final requirement before SMC can officially subscribe to a 35-percent stake in Private Infrastructure Development Corp. (PIDC), a consortium of construction companies.
The move, already postponed thrice, also represents the formal entry of the conglomerate into the toll road sector.
SMC’s stake, valued at P1.575 billion, involves the company’s purchase of 1.575 million shares priced at P1,000 each. Meanwhile, the conglomerate, led by its president Ramon S. Ang, also retains the option to increase its interest to 51 percent.
PIDC currently has a total equity of P4.5 billion, which was raised from P1 billion last month to accommodate the entry of SMC.
After the deal, SMC will own more than what PIDC’s former majority stakeholder, Consunji-led DMCI Holdings Inc., holds. DMCI subscribed to 1.45 million common shares last week, representing 32 percent in PIDC.
The Tarlac-Pangasinan-La Union Expressway is an 88.5-kilometer, four-lane highway said to cut travel time from Manila to Baguio by half. To pay for the estimated P19-billion project, PIDC will tap into owners’ equity, which will eventually be increased to P6.5 billion.
The remainder will be paid for by a combination of government subsidies and bank loans spearheaded by financial advisers BDO Capital & Investment Corp. and Development Bank of the Philippines.
Meanwhile, PIDC chief financial officer Myra Reinoso said the expressway will likely start construction by the fourth quarter, as she expects the Department of Public Works and Highways to deliver the right of way no later than this month. Completion of the project is expected in 2013.
Aside from DMCI, other PIDC stakeholders are First Balfour Inc., DM Wenceslao and Associates Inc., CM Pancho Construction Inc., RD Policarpio and Co. Inc., JV Angeles Construction Corp., JE Manalo and Co. Inc., New Kanlaon Construction Inc., EEI Corp. and Rockford Development Corp.
http://businessmirror.com.ph/home/companies/15872-smc-formalizes-entry-in-toll-road-venture.html
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