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Neda committee endorses 2 PPP projects

Manila Standard Today, 27 August 2014

By Othel V. Campos

 

The Investment Coordination Committee of the National Economic and Development Authority approved two public-private partnership projects that aim to improve land and water transportation systems.

The committee approved on Aug. 23 the P17.5-billion Davao Sasa port project and conditionally cleared the P19.3-billion Motor Vehicle Inspection Center Project. Both projects will be implemented by the Transportation Department.

The Davao Sasa port project involves the construction of a world-class container terminal that is expected to enhance port operations, reduce vessel waiting time and attract direct calls of large foreign container vessels that will translate to reduced shipping costs for shipments to and from Mindanao.

Under the build-operate-transfer scheme, the private partner will finance the construction and upgrading of existing port infrastructure, operate and maintain the improved port facility.  It will be allowed them to collect user fees for cargo and ancillary services for the next 35 to 40 years.

Meanwhile, the Neda committee approved under certain conditions the Motor Vehicle Inspection Center project.

Finance Secretary Cesar Purisima said the project should first prioritize public transportation, before subjecting private vehicle owners into the same routine and costly inspection system.

He said there was no pressing need to force private owners to have their vehicle checked yearly.

The project will be implemented via the BOT structure initially for 10 years, which is renewable for another 10 years.

The private sector partner will build, finance, operate and maintain the motor vehicle inspection center and should supply and maintain the equipment.

Under the proposal, there will be five jurisdictions each with a single concessionaire. It will also allow for the inclusion of sub-franchises to be owned and operated by Filipino nationals with the concessionaire having overall responsibility.

 

Ayala raising P15B from sale of preferred shares

The Philippine Star, 27 August 2014

By Richmond S. Mercurio

 

MANILA, Philippines – The country’s oldest conglomerate, Ayala Corp. (AC), is planning to raise P15 billion in fresh funds through the sale of preferred shares.

In a disclosure yesterday, AC said its board of directors approved the re-issuance and offering of up to 30 million preferred Class B shares at P500 per share.

AC said the new series of Class B shares will be offered with a fixed quarterly dividend rate and are structured as perpetual equity securities that have preference in the payment of dividends.

“The approval has authorized the setting of the benchmark rate prior to the issue date that shall be based on either the five-year or seven-year PDST-R2 benchmark plus a spread to be determined at such time,” the company said.

“Payment of current dividends shall be cumulative. This series of the preferred shares shall be non-convertible and shall have no voting and pre-emptive rights,” AC added.

BPI Capital Corp. has been tapped as the issue manager for the share sale which is still subject to regulatory approvals.

The conglomerate said the Class B shares will be listed on the Philippine Stock Exchange, adding that it will apply to use a stock symbol that will readily distinguish the new series from the current outstanding series of preferred Class B shares that currently trade under the symbol ACPB.

AC’s net income stood at P9.8 billion in the first half of the year, up 34 percent from a year ago on the back of a solid performance of its core businesses, particularly Ayala Land. Globe Telecom and Manila Water.

The group earlier vowed to invest a total of $1 billion in energy and infrastructure projects through 2016.

It recently won the Light Rail Transit-1 extension project in partnership with the Metro Pacific Group, and was the highest complying bidder, together with the Aboitiz Group, for the Cavite-Laguna Expressway project.

 

Ayala offers P15B preferred shares

Malaya Business Insight, 27 August 2014

By Albert Castro

 

Ayala Corp. said it plans to raise P15 billion by issuing preferred shares for future investments in power and infrastructure projects. Ayala is offering a new “series” of its Preferred B shares sold last year.

Delfin Gonzales Jr., Ayala chief finance officer, told regulators the share sale will comprise 30 million shares to be sold at P500 each and will be listed with the Philippine Stock Exchange.

“This will be used for investments and refinancing,” Gonzales also said.

Ayala said the bonds will be structured as “perpetual equity securities,” shares that have no maturity and pay dividends indefinitely, and which will have priority in dividend pay.

It will be priced based on the prevailing market rate of either the 5-year or 7-year PDST (Philippine Dealing System Treasury) rate plus a premium.

The dividend pay is cumulative.

The shares are non-convertible and have no voting and pre-emptive rights.

The shares will carry a call option on the 5th or 7th year of issuance with the company having the option to adjust the shares’ dividend yield if not redeemed, using either the prevailing 5-year or 3-year PDST rate plus a premium.

The company though said it will retain the original dividend pay should it remain higher than the benchmark.

“If the shares are not redeemed at the end of the 10th year, the dividend yield shall be reset to the higher of either: (a) the adjusted dividend rate; or (b) the then prevailing 10-year PDST-R2, plus a spread,” Ayala also said.

The company closed the first half of the year with profits of P9.8 billion over revenues of P91.16 billion, a 34 percent increase in profit over last year while revenues were up 22.2 percent.

It is in the midst of diversifying its business to the power and infrastructure sector, allocating P24 billion as capital expenditures.

Together with the Metro Pacific group, it recently won the Light Rail Transit 1 bid and was the highest complying bidder, together with the Aboitiz group, for the Cavite-Laguna Expressway project.

Since 2012, the company has been eyeing to invest as much as $1 billion in energy and infrastructure projects through 2016. It has so far committed equity of close to $500 million in various power and transport infrastructure projects.

Ayala Corporation to raise P15B through issuance of preferred shares

Manila Bulletin, 26 August 2014

By James Loyola

 

Ayala Corporation, the country’s oldest conglomerate, is raising P15 billion through a preferred share issuance in preparation for future investments — including power and infrastructure projects.

In a disclosure to the Philippine Stock Exchange, the firm said it is planning of up to 30 million of a new and separate series of Preferred Class “B” shares towards the end of the year.

The new series of preferred class B shares will be issued at P500 each with a fixed quarterly dividend rate. The benchmark rate will be based on either the five- or seven-year PDST-R2 rates plus a spread.

The shares can be redeemed on the fifth, seventh or 10th years. This series of preferred shares will be non-convertible and will have no voting and pre-emptive rights.

The preferred shares will be listing on the Philippine Stock Exchange. BPI Capital Corporation will be the issue manager, said Ayala Managing Director Delfin C. Gonzalez Jr.

The Ayala Group earmarked nearly P190 billion for capital expenditures this year to continue its investment programs in its real estate, banking, telecommunications, and water businesses as well as to ramp up its new businesses.

Ayala reported that its net income jumped 34 percent to P9.8 billion in the first half of the year, driven by the solid performance of its core businesses, particularly Ayala Land, Globe Telecom, and Manila Water.

Equity earnings from Globe, which quadrupled year-on-year, more than offset the decline in the contribution of banking unit, Bank of the Philippine Islands (BPI), which registered lower trading gains in the first half of this year.

The substantial improvement in equity earnings from international businesses also boosted earnings in the first semester, which included a P1.8 billion net gain from the sale of Stream Global Services, Inc. by LiveIt.

Altogether, these put total equity earnings in the first half of the year at P12.8 billion, up 35 percent versus the same period last year.

Ayala’s core business units largely outperformed first half last year’s earnings.

Ayala President Fernando Zobel de Ayala said “we remain optimistic that this momentum can continue given the government’s ongoing reforms and the efforts to push for vital infrastructure projects that can unleash development opportunities and address critical bottlenecks.”

 

Ayala to offer P15-B preferred shares for infra, power funding

The Manila Times, 26 August 2014

By Kristyn Nika M. Lazo

 

LISTED conglomerate Ayala Corp. (AC) is set to raise P15 billion funds through a preferred shares sale for future projects, particularly in power and infrastructure.

In a disclosure, AC said it will offer 30 million new and separate shares under Preferred Class B shares, priced at P500 per share.

The preferred shares will have a quarterly dividend rate. The company will set a benchmark rate prior to the issue date that shall be based on five-year or seven-year PDST-R2 benchmark plus a spread.

BDO Capital was appointed issue manager of the preferred shares.

The preferred shares may be redeemed at the end of fifth, seventh, and 10th years after the sale. Payment is cumulative. The series of preferred shares are non-convertible, with no voting and pre-emptive rights. AC said the Class B preferred shares are still “subject to regulatory approvals” and later will be listed at the Philippine Stock Exchange, to be traded under the “ACPB” symbol.

The oldest conglomerate in the country grew its first half consolidated net income by 34 percent to P9.8 billion, driven by higher sales of property, telecommunications, and water utility subsidiaries.

It had set aside P24 billion capital expenditures in 2014 for the company’s investments in the power and transport sector, several of which are public-private partnership (PPP) projects. The company is investing a total of $1 billion capex in the years 2012 to 2016 for energy and infrastructure projects.

AC recently won the Light Rail Transit 1-Cavite Extension bid, together with the Metro Pacific group, and was the highest complying bidder together with the Aboitiz group for the Cavite-Laguna Expressway project.

Founded in 1834 and incorporated in 1968, AC is the holding company of the Ayala family’s businesses which include water (Manila Water Company Inc.), telecoms (Globe Telecom Inc.), property (Ayala Land Inc.), semiconductors (Integrated Micro-Electronics Inc.), banking (Bank of the Philippine Islands), and education (LiveIt Investments) among others. It is 50.56-percent owned by Mermac Inc., 10.52-percent by Mitsubishi Corporation, and 38.92-percent by the investing public.

 

LRT 1 tracks to be replaced starting Dec. 5, LRTA says

Business Mirror, 25 August 2014 / ABS-CBN News, 26 August 2014

By Lorenz S. Marasigan

 

THE tracks of Light Rail Transit (LRT) Line 1, Southeast Asia’s first overhead railway system, will be replaced starting December 5.

Light Rail Transit Authority (LRTA) Spokesman Hernando T. Cabrera said the replacement of the rails of the LRT Line 1 is part of the government’s thrust to improve the quality of transportation in the country.

“For LRT Line 1, the delivery of parts is slated in two months’ time, so that’s by end-October. We will start replacing the rails by December 5,” he told the BusinessMirror in a phone interview.

The P270-million project is expected to be completed in two years.

“We will replace roughly 17 kilometers of the rails in the southbound lane,” Cabrera added.

The line consists of 20 stations from Baclaran to Monumento, and runs on 20.7 km of fully elevated tracks. More than 500,000 commuters use the rail system referred to as the yellow line daily.

The government plans to expand the railway system by adding additional stations to Cavite through a P65-billion public-private partnership project.

But the awarding of the project to its winning bidder—the tandem of Metro Pacific Investments Corp. and Ayala Corp.—has been stalled by a legal impediment. Included in the contract is the design component of the P1.4-billion Common Station Project, a venture that is being questioned by a property developer before the Supreme Court.

The high tribunal decided to impose a stay order on the common hub, subsequently barring the transport agency from awarding the P65-billion Cavite Extension deal to the lone bidder.

The multibillion-peso railway-expansion project aims to extend the existing Line 1 by 11.7 km, adding eight new stations, where approximately 10.5 km of the extension will be elevated and 1.2 km will be at-grade. The winning bidder will also serve as the operator and the maintenance provider of the railway line.

 

DOTC still not keen on MPIC’s proposal to expand MRT

ABS-CBN News, 26 August 2014

 

MANILA – The Department of Transportation and Communications (DOTC) is still not keen on the proposal of Metro Pacific Investments Corp. (MPIC) to expand the Metro Rail Transit Line 3 (MRT-3).

MPIC revived on January its $300 million proposal to expand the operations of the mass transit system, but Transportation Secretary Jun Abaya said the agency has again rejected MPIC’s unsolicited proposal.

“We have already rejected that,” he said.

MPIC President and chief executive officer Jose Maria Lim previously urged the DOTC to consider the proposal, in light of the proposed P56 billion equity value buy-out of the private shareholders of Metro Rail Transit Corp. (MRTC).

“The buyout that has been contemplated by government is in that equity value buyout. What we proposed to government is for them to allow or to consider the expansion plan proposed by MPIC and that does not invoke the equity value buyout because it works in the existing BLT agreement,” Lim said in January.

MPIC has control of 48 percent in MRTC, but Abaya said the firm has already been warned about exercising its rights.

He said that being a railway operator is valid ground for the revocation of the P1.72 billion automated fare collection system (AFCS) project awarded to the tandem of MPIC and Ayala Corp.

“They should be careful. Usec. [Jose Perpetuo] Lotilla has already warned that if they execute the option, they become an owner of a rail facility that will be a ground for disqualification of AFCS,” Abaya said.

 

MNTC pushes back completion date for NLEX Segment 10

InterAksyon, 25 August 2014

By Darwin G. Amojelar

 

MANILA – The operator of the North Luzon Expressway (NLEX) has pushed back the completion date of the elevated highway linking Valenzuela and C3 Road in Caloocan City.

In a regulatory filing, Manila North Tollways Corp (MNTC) said the construction of Segment 10 of NLEX, which started in June this year, is expected to be completed by the third quarter of 2016. The company earlier scheduled project completion by May of that year.

MNTC said the pre-construction activities of Leigthon Contractors Asia Ltd for the P11.5 billion elevated portion of the NLEX Harbor Link are in “full swing.”

Under the contract, Leighton will construct 5.6 kilometers of elevated highway in northwest Metro Manila linking Mac Arthur Highway in Valenzuela City and C3 Road in Caloocan City near the port area.

MNTC said the Philippine National Railways (PNR) has already granted Department of Public Works and Highways (DPWH) easement rights on the properties for the use of Segment 10 equivalent to almost 60 percent of the area required for the project.

“The remaining right of way is progressively being acquired by the DPWH,” MNTC said.

Daily traffic for Segment 10 is projected to average 30,000 vehicles. In the first quarter of the year, vehicle traffic at NLEX hit 182,000, or six percent more than last year.

The Segment 10 Project is funded by the company’s newly- raised P7 billion fixed-rate bonds, along with internally generated cash and loans from insurance companies obtained during the fourth quarter of 2013.

Construction of Segment 9 is projected to be completed before the end of the year.

“With only 11 percent remaining of the required right of way remaining to be delivered by the government, the DPWH has provided positive assurance of complete site possession by November 2014,” MNTC said.

Costing about P1.59 billion, this segment features a 2.4-kilometer, four-lane at-grade expressway that spans from the Smart Connect Interchange Cloverleaf to MacArthur Highway in Valenzuela City.

Besides NLEX, MNTC operates the Subic-Clark-Tarlac Exressway (SCTEX). The company is a unit of Metro Pacific Tollways Corp (MPTC), which in turn is a subsidiary of Metro Pacific Investments Corp (MPIC).

InterAksyon.com is the online news portal of TV5, which like MPIC is chaired by Manuel V. Pangilinan.

 

Gov’t warns MPIC on MRT 3 expansion plan

The Manila Times, 25 August 2014

By Rosalie C. Periabras

 

THE Department of Transportation and Communications (DOTC) warned Metro Pacific Investment Corp. (MPIC) about its renewed offer to increase its ownership and expand the operations of the Metro Rail Transit Line 3.

It added that if MPIC pursues this plan, it could be a ground for their disqualification from the P1.72 billion Automatic Fare Collection System (AFCS) project. This was a concession agreement they signed with the government providing for a single ticketing scheme for the country’s rail lines including MRT 3, MRT 2, and the Light Rail Transit Line 1.

“We have already rejected that, they should be careful,” DOTC Secretary Joseph Emilio Abaya said of MPIC’s expansion plan. He added that Undersecretary Perpetou Lotilla had already issued a warning to the firm of its possible disqualification from the AFCS project.

Earlier reports said that MPIC has revived its $300-million offer to expand the capacity of MRT 3 by acquiring additional coaches. It also has a separate $350 million offer to acquire equity and bonds issued by Metro Rail Transit Corp. (MRTC), the private contractor that built MRT 3.

MPIC, which is led by businessman Manny Pangilinan, has a controlling stake of 48 percent in MRTC after signing cooperation agreements with the various groups that hold rights and interests in MRT 3.

This runs right in the face of government’s plan to gain control of the operations of MRT 3 from MRTC. In March last year, President Aquino ordered the takeover in order to save on huge government subsidies to the ailing railway line.

“If they become an owner of a rail facility that will be a ground for their disqualification from AFCS… am sure their lawyers know that,” Abaya told reporters.

MRTC has a pending arbitration case in Singapore against the Philippine government over its late payment of equity rentals. It filed another case over the DOTC’s decision to award to a Chinese firm the contract to supply 48 new light rail vehicles for MRT 3.

According to Abaya, the MRT 3 buyout requires the blessing of the arbitration court.

The DOTC earlier said that the takeover of MRT 3 by the government is possible this year, with the Department of Budget and Management including the buyout price of P56 billion in the 2014 budget.

The takeover would involve an equity value buyout of all outstanding shares of stock and other securities issued by the MRTC and other entities owning the MRT 3 pursuant to a build-lease-transfer (BLT) agreement.

Abaya said the DOTC and the Department of Finance should speed up the buyout of MRTC to free government from having to deal with companies such as MRTC.

 

MRT7 construction to start before 2014 ends

Rappler, 26 August 2014

 

After several years of delay, San Miguel secures a performance undertaking from the finance department, green lighting the P63-billion PPP project

MANILA, Philippines – The Department of Transportation and Communications (DOTC) expects the construction of the P63-billion ($1.44-billion)* Metro Rail Transit Line 7 (MRT7) to start before 2014 ends.

San Miguel Corporation finally obtained a performance undertaking from the Department of Finance (DOF) after years of delay.

The proposed train project that is expected to serve 2 million commuters will start at Tala, Caloocan City, and pass through Lagro and Fairview, Novaliches, Batasan, Diliman, PHILCOA, before ending at EDSA corner North Avenue in Quezon City.

DOTC Secretary Joseph Emilio Abaya expressed optimism that San Miguel could do the financial closing soon.

“We asked them to do it (financial closure) sooner than 18 months. They are saying they could do advance works once they get the green light. We hope before next year they can start construction,” Abaya said.

He added that Finance Secretary Cesar Purisima already signed the performance undertaking for the public-private partnership (PPP) project.

The project, to be funded by official development assistance from Japan Bank for International Cooperation, needs a performance undertaking from the DOF representing a financial guarantee.

Years of delay

The construction of the 22.8-kilometer train line with 14 stations has been delayed for almost 4 years because of San Miguel’s failure to secure a performance undertaking from the DOF.

In 2008, DOTC signed a contract with Universal LRT Corporation Ltd (ULC BVI) to build the railway system and develop the project’s real estate and commercial components. San Miguel’s wholly-owned subsidiary San Miguel Holdings Corporation executed a share sale and purchase deal in 2010 to acquire 51% of ULC BVI from the group of Salvador Zamora II.

The MRT7 project worth $2.2 billion was supposed to start construction in 2010 and commercial operations by 2012. ULC BVI had said $320 million of the project’s total cost would be financed by equity, and the rest by borrowings.

DMCI Holdings Incorporated through construction arm DM Consunji Incorporated entered into a joint venture with Marubeni Corporation of Japan in 2012 for the engineering, procurement, and construction of MRT7 and its Intermodal Transportation Terminal. – Rappler.com

 

*($1 = P43.86)