Metro Pacific hikes capital to P12 B ahead of expansion

Metro Pacific Investments Corp. (MPIC), the Philippine unit of Hong Kong-based conglomerate First Pacific Co. Ltd., filed yesterday with the Securities and Exchange Commission its application for an increase of its authorized capital stock from P4.6 billion to P12 billion.

Out of the new capital base which comprises 11.95 billion common shares and five billion preferred shares, P2.03 billion worth of shares has been subscribed and paid for by Metro Pacific Holdings Inc. (MPHI)

The capital hike forms part of MPIC’s recapitalization plan which includes the acquisition of additional shares in Maynilad Water Services Inc. and the conversion of existing advances into equity in Makati Medical Center and Davao Doctors.

The plan is aimed at boosting MPIC’s shareholders’ equity to P13 billion from P5.4 billion and expanding its net asset value per share to P1.84.

Under the plan, MPIC will issue up to 1.57 billion new common shares  to MPHI at P2 each share to settle advances made by MPHI to acquire 34 percent of Davao Doctors and First Pacific’s 10.3-percent stake in Maynilad.

When completed, MPIC’s ownership in DMCI-MPIC Water Co. (Bidco), the consortium that won the bid to acquire 84 percent of Maynilad, will increase to 55.3 percent from 20.8 percent through the conversion of First Pacific’s notes valued at $57 million and the  acquisition of Ashmore Investment Management Ltd.’s  24.2-percent  interest in Bidco for $140 million.

Funding for the acquisition of Ashmore’s stake in Bidco will come from First Pacific, which intends to settle this through the issuance of 2.22 billion new common shares to MPHI equivalent to $100 million.  The remaining $40 million will be settled by way of shareholder advances.

The recapitalization plan will set the stage for future fund-raising activities for MPIC’s entry into infrastructure, agriculture, mining  and port operations.