Ayalas may not sell MRT stake after all

Instead of selling its equity stake in Metro Rail Transport Corp., property developer Ayala Land Inc. (ALI) may just float an instrument which securitizes its share in the future rental income stream of the EDSA rail system operator.

ALI assistant corporate secretary Renato Marzan told the Philippine Stock Exchange that in the case of MRTC, ALI is considering, among other options, the possibility of selling or trading a financial instrument for its MRTC income share, "and not necessarily an outright sale of its indirect equity holdings in the company."

ALI president Francisco Licuanan III, was quoted last week as saying that the company may give up its investments in non-property affiliates such as Pilipinas Makro Inc. and MRTC in a bid to further rationalize operations and focus on real estate and infrastructure projects.

ALI has a 15.8-percent interest in MRTC, which owns and operates the Metro Rail Transit system or MRT 3 running along EDSA. In addition, it holds 28 percent of Pilipinas Makro, which is into wholesale distribution of consumer products.

Marzan emphasized that for the company’s interests in both Makro and the rental income streams of MRTC, "ALI expects to realize a price which accurately reflects the full value of these companies, taking into account their character as ongoing operating companies with a stable stream of cash flows."

Outside of the parent company Ayala Corp., the ALI group by itself is a large mix of over 20 different companies engaged in allied businesses (landholding, construction, property development and management, hotel operations, industrial estate development, and infrastructure) as well as subsidiaries in theater management, food court operations, entertainment retailing and information technology.

While these companies are majority controlled by ALI and are complimentary in nature, Licuanan said this is not entirely the same for their affiliates wherein ALI has minority control.

The Fil-Estate group dictates the operations of MRTC while the Dutch parent firm Makro has control over the store network’s local operations.

Aside from Makro and MRTC, ALI has a minority stake in shopping center operations in Alabang Commercial Corp. and Lagoon Development Corp., and mixed-use property developer Cebu Holdings, Inc.