Ayalas, Lopezes, Tys, 7 others eye PNCC

The ongoing political crisis has not dampened the lure of the cash-rich Philippine National Construction Corp. (PNCC) as government finalizes plans for its privatization on Oct. 30, 2000.

In a pre-bidding conference held over the weekend, 10 interested bidders showed up, led by the Zobel-owned Ayala Land, Inc., the Lopez-owned First Philippine Infrastructure Corp., and First Metro Investments Corp., the investment arm of banker George S.K. Ty.

Also present during the pre-bidding conference were MCC Development and Construction Corp.; State Investment Corp.; Nova Management Corp.; Dong-A Pharmaceutical Co. Ltd. of South Korea and three companies represented only by their law offices: Platon, Martinez, Flores, San Pedro, Leaño Law offices; Derma Law Office and Picazzo Law Office.

Sources at the Asset Privatization Trust (APT) revealed that despite the adverse political conditions which might be used as an excuse to push the bid price down, the public bid would proceed as planned.

The dispute over the ownership of the PNCC shares had earlier been settled by the Securities and Exchange Commission (SEC), clearing the way for the privatization of the PNCC. This is if PNCC’s founder and former owner, Rodolfo Cuenca, does not resort to other legal means to stop the sale and re-establish his claim of ownership.

For sale are about 178 million shares held by various government financial institutions and the National Development Co., all creditors of the PNCC which converted the company’s debts into equity during the time of former President Ferdinand Marcos.

PNCC has been under government control until it was earmarked for privatization as one of the last attractive publicly-held assets that had good chances of commanding substantial bids on the auction block.

Government’s majority interest in PNCC is held by the APT which expressed optimism that the company is an attractive prospect under any political condition because of its tollway franchise that ensures a steady and significant cashflow.

PNCC holds a 25-year franchise for the Northern and Southern Luzon Expressways that will expire by the year 2007 but is renewable for another 25 years.

Under the PNCC’s existing franchise, the extension is automatic provided that the company will extend the tollway itself. Ayalas, Lopezes.

PNCC already has a joint-venture with the Lopez-owned Benpres Holdings for the extension of the Norhtern Luzon Expressway, and a partnership with the Hopewell group to extend the Southern Luzon Expressway.

The PNCC shares to be sold comprise the combined holdings of the government held by APT, Government Service and Insurance System, Social Security System, and the Philippine Commission on Good Government.

APT said that although the PNCC still has to lobby successfully for the restructuring of its debts, the company’s cashflow is attractive since it has the sole tolling franchise for the South Luzon Expressway and the North Luzon Expressway, the two most significant expressway facilities in Luzon.