Metro Pacific unit to borrow P17B for CCLEx construction

CEBU, Philippines - Metro Pacific Investments Corp. (MPIC) has confirmed its subsidiary Metro Pacific Tollways Corp. (MPTC) is borrowing up to P17 billion to fund the construction of the Cebu-Cordova Link Expressway (CCLEx).

In a disclosure to the Philippine Stock Exchange yesterday, MPIC said the project will be funded through a combination of debt, internal cash and equity.

"The equity contribution of MPIC for these projects (the Cebu-Cordava bridge and Cavite-Laguna Expressway) will be sourced internally," the infrastructure conglomerate said.

"Furthermore, the viability of these projects will in large part be subject to the immediate and satisfactory resolution of the pending tariff issues with the government," MPIC also noted.

MPTC, the tollways arm of MPIC, is currently in talks with banks for the planned capital borrowing for the two projects.

The start construction date for the P27.9-billion Cebu-Cordova toll bridge is seen by July this year.

In a previous interview, MPTC President Rodrigo Franco said Cebu is deemed as an expansion area for the company's tollways business given its continued economic development and potential of its healthy car ownership profile.

The 8.25-kilometer toll bridge will connect Cebu City to Mactan Island via Cordova, envisioned to decongest the traffic in the two existing bridges (Marcelo Fernan Bridge and Mandaue Bridge) between Mactan and Cebu, due to the worsening traffic situation in the area. It is located around 7.5 kilometers south of Mandaue Bridge and will take off from the Cebu South Coastal Road crossing the Mactan channel to Mactan Island.

This year MPIC has set a P79-billion capital expenditure budget from P40.5 billion last year. Of the total spending budget, P22 billion-P24 billion will be spent for the construction of more toll roads.

In 2016, MPIC reported a core net income of P12.1 billion, up 17 percent from the P10.3 billion posted in 2015, attributed to robust traffic growth on its toll roads; expanded power portfolio; continuing growth in the hospital business; first full-year contribution from its rail operations; and profitable entry into the logistics business.

MPIC's toll roads business accounted for P3.5 billion or 23 percent of  its net operating income.

MPIC -- which has investments in water utilities, toll roads, electricity distribution, healthcare services and light rail -- is one of the three key Philippine units of Hong Kong-based First Pacific Co. Ltd. aside from Philex Mining Corp. and PLDT, Inc.

Shares of MPIC were trading at P6.10 apiece in morning yesterday. (FREEMAN)