MPIC seeks P8 billion to fund tollroad, hospital projects

HONG KONG – Metro Pacific Investments Corp. (MPIC), the Philippine flagship of Hong Kong-based industrial conglomerate First Pacific Co. Ltd., is hoping to raise up to P8 billion over the next two years from the debt market to fund its tollroad and hospital projects.

In a press briefing, MPIC chief finance officer David Nicol said about P5.3 billion will be needed by tollroad unit Metro Pacific Tollways Corp. (MPTC) for the construction of Segments 9 and 10 and the NLEX-SLEX connector road from 2011 to 2012. The three tollroad projects require a total investment of P25 billion.

Segment 9, a four-lane, 2.42-kilometer stretch that will connect the North Luzon Expressway (NLEX) to MacArthur Highway in Valenzuela City is estimated to cost around P1.187 billion while Segment 10, a two-lane, five-kilometer elevated road from MacArthur Highway to Radial Road R-10 will require an investment of P5.13 billion.

The P17-billion connector road, on the other hand, will connect the NLEX at C3 to Skyway 1 along the South Luzon Expressway (SLEX) in Makati.

Nicol said another P2 billion will be needed to support the hospital group’s acquisition binge. The group, which is targeting to a total network of 15 in the next five years, is in discussions with several hospital owners and expects to conclude a deal before the year ends. It currently has four hospitals in its portfolio – Makati Medical Center, Cardinal Santos, Davao Doctors and Bacolod-based Riverside Medical Center.

He said the group, which has cash holdings of about P2.3 billion, is now in talks with various financial institutions for either a bond issue or bank debt.

Nicol said the group is very bullish about its prospects this year and the coming years given the new government’s thrust to have more public-private sector partnerships. “These are exciting times with a government talking about public/private partnerships,” he said.

MPIC’s equity stood at P47 billion as against debt of only P6.6 billion. Power utility unit Meralco is self-sustaining and has cash of between $2 billion and $3 billion which it could tap for new investments.

MPIC reported a more than two-fold jump in its first half core earnings this year to P1.93 billion on higher contributions from its tollway and water distribution units as well as the first-time contribution of Manila Electric Co. (Meralco).

Consolidated net income, which reflects a net foreign exchange loss and non-recurring losses of P172 million, amounted to P1.75 billion as against P1.7 billion a year earlier. Revenues grew 18 percent to P8.86 billion.

MPIC’s investment in Meralco added P666 million or 24 percent of equitized core earnings. Meralco is seen to report a net income of P8.1 billion this year. In the first half this year, the power utility reported a core net income of P5.81 billion, up 82 percent.

Maynilad Water Services Inc. accounted for P1.28 billion or 46 percent of the aggregate net profit contribution to MPIC or a four-fold increase from the year ago’s contribution on higher billed water volume. It has earmarked P35 billion over a five-year period for its capital expenditure program.

MPTC chipped in P761 million or 27 percent of total profit from operations, representing an 11.9 percent growth from P680 million the previous year.