South Luzon Tollways to close financing deal with IFC, BdO

KUALA LUMPUR – The South Luzon Tollways Corp. (SLTC), a member of the MTD Group of Malaysia, is set to close its P11.5 billion financing deal with the International Finance Corp. (IFC) and a consortium of banks led by Banco de Oro (BdO) on Nov. 15 this year, according to Vincent Lee, general manager, overseas operations of the MTD Group.

The P11.5 billion will be used to rehabilitate and extend the South Luzon Expressway (SLEX) up to Sto. Tomas, Batangas. According to Lee, SLTC was initially hoping to raise only P5.5 billion from a loan syndication.

However, there was an overwhelming response and the loan package was oversubscribed resulting in a total financing package of P9 billion.

Apart from the bank consortium, the IFC, the private sector investment arm of the World Bank, is extending $50 million or P2.5 billion for the SLEX project.

The MTD Group is putting in P3.5 billion of its own money for the preliminary civil works which have already started in the road widening and traffic mitigation under the Alabang viaduct and the construction of a flood culvert along the San Pedro and Alaska milk factory exit.

The other members of the bank consortium, Lee divulged, include Metropolitan Bank, Allied Bank, Development Bank of the Philippines, Bank of China, ING Bank, Security Bank and Maybank.

BdO is the sole lead but all of the banks, including IFC, would be treated on a parri passu or equal basis, Lee disclosed.

The loan would be for a seven-year period and would not involve a sovereign guarantee from the Philippine government.

In a press familiarization tour and briefing at the MTD offices in Malaysia, MTD Group managing director Dato’ Azmil Khalid sought to assure visiting Filipino journalists that the MTD Group has not sought a sovereign guarantee for its IFC and private bank loan, relying solely on the Group’s credit standing.

MTD, together with the Philippine National Construction Corp. (PNCC), will rehabilitate the SLEX, repair the 1.2 kilometer Alabang viaduct, connect the SLEX to the STAR highway and extend the expressway up to Sto. Tomas, Batangas.

The MTD Group has a total market capitalization of $700 million.

The MTD Group includes MTD Capital, Metacorp, ACPI and the MTD Construction Sdn Bhd which took over the stake of Hopewell Crown Infrastructure Inc. (HCII).

HCII had a joint venture agreement with the PNCC way back in 1999 for the then estimated $480 million, 88.35 kilometer extension of the SLEX from Alabang to Lucena City.

The planned extension never took off and HCII eventually turned over the project to the MTD Group after the Malaysian Group bought the shares of Crown Equities Inc., and the Hong Kong-based Hopewell Holdings Ltd. (which is controlled by Gordon Wu) in HCII.

MTD Construction and PNCC have since formed the South Luzon Tollways Corp. (SLTC) which will be the corporate vehicle that will run the project.

MTD Construction is one of the top five infrastructure firms in Malaysia.

The MTD Group is the toll operator of the showcase 60-kilometer Kuala Lumpur-Karak and the 169 kilometer East Coast Expressway.

The KL-Karak Highway was upgraded at a cost of $5 billion or RM 460 million from 1994 to 1998.

The East Coast Expressway was awarded to the MTD Group in 20002 and was opened to the public in 2004. It cost RM 1.3 billion. The KL-Karak Highway and the East Coast Expressway basically links Malaysia from west to east from Kuala Lumpur.

Aside from other major infrastructure projects in Malaysia, the MTD Group also has other major projects in Australia, China, Chile, Dubai, India, Indonesia, Saudi Arabia, Sri Lanka and Vietnam.