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Stock Commentary

MacroAsia confirms invitation to join new Sangley Airport consortium

Merkado Barkada
MacroAsia confirms invitation to join new Sangley Airport consortium
For MAC shareholders, “non-equity” basically means that it will perform contractual services for the SPIA Development Consortium, and not be exposed to any of the ultra-juicy upside of the profits coming from the concession itself.
Merkado Barkada

The confirmation comes after MacroAsia [MAC 5.25 0.57%], Lucio Tan’s airport/infrastructure company, was reported to have been invited to join the “SPIA Development Consortium” (between the Virata and Yuchengco families) as a non-equity partner.

MAC said that it was asked to provide “management and technical services for the aviation support and logistics components of the project”, but was unable to provide any more information than what was already reported on in the news article.

This new SPIA Development Consortium has “won” “original proponent status” from the Government of Cavite for the massive $10.9 billion airport development project, replacing the old consortium between MAC and the blacklisted/sketchy China Communications Construction Co. (CCCC).

The MAC/CCCC consortium was also awarded “original proponent status” after a remarkably odd bidding process, and eventually lost that status after an even more remarkably odd post-award period where the Sangley Point International Airport project was inaugurated, but MAC and CCCC were unable to remedy “various deficiencies” in their post-award requirements (largely around funding) and were stripped of this status in January of 2020.

MB BOTTOM-LINE

 It’s almost like “sketchy and weird” is built into the very DNA of this project.

I could go through all the steps that have brought us to this point, starting with Cavite’s removal of the project from the national government’s infrastructure development bidding process due to the “difficulty” of “government procedures for construction”, moving on to Governor Remulla’s premature “outing” of several high-profile companies as potential bidders (causing all but one of those companies to submit same-day disclosures to deny interest/participation), and now with this quiet pivot to a bidding group that was not part of the original process that just sort stapled MAC into the back of the bid.

My spidey-senses have been tingling about this one from the very beginning; it’s been an intrigue-generating machine (when active), and the machine appears to have been turned on again.

For MAC shareholders, “non-equity” basically means that it will perform contractual services for the SPIA Development Consortium, and not be exposed to any of the ultra-juicy upside of the profits coming from the concession itself. Quite the fall, but better than nothing? 

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MACROASIA CORP. PHILIPPINE STOCK EXCHANGE
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