DMCI to invest additional P1.45 billion in Tarlac-La Union tollway

MANILA, Philippines - DMCI Holdings Inc., the listed investment holding arm of the Consunji family, is subscribing to the capital increase of Private Infra Development Corp. (PIDC) amounting to P1.45 billion.

In a disclosure to the Philippine Stock Exchange, DMCI said its board approved the subscription of 1.449 million common shares out of PIDC’s increase in capitalization of P3.5 billion

DMCI said its board also approved the waiver of pre-emptive rights in connection with the acquisition by San Miguel Corp.’s wholly-owned unit, Rapid Thoroughfares Inc. (RTI) of 1.575 million common shares of PIDC, representing a 35 percent equity in the tollroad company.

PIDC won a government concession to operate and build the P15 billion Tarlac-Pangasinan-La Union toll expressway project. The 88.5-kilometer tollroad project will extend from La Paz, Tarlac to Rosario, La Union, providing a seamless land link between Manila and Northern Philippines. Once completed, it is estimated that the expressway will cut by half the travel time from Manila to Baguio.

RTI will pay a portion of the subscription price amounting to P560.85 million on closing of the deal. The balance of the subscription price will be paid pursuant to the capital calls of PIDC on such dates and amounts as may be determined by the PDIC board. 

PIDC is owned 34 percent each by DMCI and First Balfour Inc. Other shareholders include construction giant EEI Corp., R.D. Policarpio and Co. Inc., D.M. Wenceslao and Associates Inc., J.V. Angeles Construction, J.E. Manalo and Co.Inc., New Kanlaon Construction Inc. and Rockford Development.

San Miguel has an option to raise its stake in PIDC to 51 percent.

The three-phase project, which is being undertaken via a build-operate-transfer (BOT) contract between the Department of Public Works and Highways (DPWH) and PIDC, is targeted for completion in 2013 with the first two sections expected to be finished by May 2010 and January 2011, respectively.

The estimated project cost of P15.36 billion includes a P2.9-billion subsidy from the government for certain portions of the expressway. It will initially have two lanes, but two more will be added once traffic volume reaches 25,000 vehicles a day.