MPIC to sell stakes in hospitals, tollways

MANILA, Philippines — Metro Pacific Investments Corp. (MPIC), a diversified conglomerate chaired by tycoon Manuel V. Pangilinan, is selling a portion of its stakes in its hospital and tollway businesses.

The move is aimed at beefing up liquidity and trimming debt at the parent company level.

“The only way to address the high debt level is to sell down assets to create liquidity...and it has to be of some significance to produce an effect that is substantial to the bottom line,” Pangilinan said during the company’s annual shareholders meeting yesterday.

He was responding to a question from a shareholder on the underperformance of the company’s share price.

MPIC has been trading at an average of P4.30 per share. Its highest price in the past 52 weeks was only P5.56 per share while its lowest was P4.11 per share.

Pangilinan said the regulatory problems faced by Metro Pacific Tollways Group and Maynilad Water Services Inc. had also affected the share price of MPIC.

“The underperformance of the share price can be attributed to two things. The first is that for so many years a number of subsidiaries, particularly water and tollways, have been on a state of uncertainty with respect to tariffs,” Pangilinan said.

The other reason, he said, is the high debt level as a result of additional investments.

Thus, he said, MPIC is looking to sell a portion of its stake in Metro  Pacific Hospital Holdings Inc. (MPHHI) and tap a strategic partner for tollway operations.

“We’ve indicated that we might do a partial divestment of our hospital business and I  think it’s time to get in a new strategic partner for the tollways but that would be small, maybe up to 20 percent will be available,” Pangilinan said.

MPIC is already in talks with investment banks for the hospital divestment, which is targeted to be concluded this year.

He said those that have expressed interest are mostly private equity funds.

“There have also been indications from hospital operators,” Pangilinan said.

The size of the stake that would be divested is still under discussion, he added, but what is clear is that MPIC would still retain control.

Last month, MPHHI president and CEO Augusto Palisoc Jr. said the company decided to undertake a private  placement for the hospital business instead of undertaking an initial public offering.

For the tollways business, Pangilinan said there were preliminary talks with potential foreign partners but nothing has been firmed up yet.

MPIC, one of the country’s biggest conglomerates, also has investments in infrastructure, water utility, power and  logistics.