Philippines' MPIC raises stake in Don Muang Tollway

Corporate June 03, 2014 00:00

By Philippine Daily Inquirer
Asi

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Infrastructure holding firm Metro Pacific Investments Inc has raised its interest in Thai tollroad operator Don Muang Tollway Public Co Ltd (DMT) to 29.45 per cent, from 7.36 per cent, by buying out the indirect stake held by parent conglomerate First Pac



In a statement on Friday, Hong Kong-based First Pacific announced that MPIC would buy its Thai tollroad investment for $101.25 million. 
MPIC is unfazed by the political unrest in Thailand and is instead encouraged by the country’s investor-friendly regime, the company said. 
“Thailand offers a level playing field and a regulatory regime that welcomes investment,” MPIC president Jose Ma. Lim said. 
In contrast, he said, MPIC cannot obtain toll adjustments from Philippine regulators. 
Lim sees no disruptions to DMT’s operations in Thailand’s current political climate.  “Although Thailand is experiencing some political uncertainties, we remain committed to seeking further investment opportunities there,” he said. 
The transaction involves the sale of First Pacific’s 75-per cent stake in FPM Infrastructure Holdings Ltd, the group’s holding firm for the Thai toll road business. Prior to this deal, MPIC already owned 25 per cent of FPM, thereby raising its interest to 100 per cent. FPM Infrastructure’s sole asset is a 29.45-per cent interest in DMT. 
The Thai toll road is MPIC’s first-ever investment outside the Philippines. The company plans more such offshore infrastructure investments, drawing from its business experience in the Philippines. 
“MPIC has reached a stage of development where it is ready to take its infrastructure expertise regionally. We very much look forward to seeing MPIC’s new focus on its regional infrastructure ambitions,” said Manuel V. Pangilinan, chair of the MPIC board and managing director and chief executive officer of First Pacific. 
“We are very impressed with the quality of the DMT management. We are confident that the tariff increase due at end of this year will go ahead as planned,” Lim said. 
Apart from tollroads, MPIC has interests in water and electricity distribution, and healthcare infrastructure in the country. 
MPIC intends to fund the purchase from internal resources and borrowings and settle the transaction on July 31. 
The transaction has been reviewed by MPIC’s audit and risk management committee (ARMC) in accordance with the ARMC charter and code of corporate governance. 
Working under a 27-year concession ending in 2034, DMT operates a 21.9-kilometre six-lane elevated toll road stretching from Din Daeng in central Bangkok past Don Muaeng Airport and on to the National Monument north of the capital.