MANILA, Philippines - Metro Pacific Investments Corp. (MPIC), the local flagship of Hong Kong-based conglomerate First Pacific Co. Ltd., said it expects to raise up to P14.31 billion in a share sale to partly fund its equity investment in power giant Manila Electric Co. and its participation in a tollways project located south of Metro Manila.
In a disclosure to the Philippine Stock Exchange, MPIC chairman Manuel V. Pangilinan said the company successfully completed the international roadshow for the share offer, reflecting the “continuing faith of the international investment community in our country.”
“It is as well a true testament of positive investors’ confidence in MPIC, and thereby affirms our position as a prime infrastructure investment and management company in the Philippines. We are pleased to have had a record offering of shares so far for 2009 after the global crisis of 2008,” Pangilinan said.
The first step involves the sale by Metro Pacific Holdings Inc. (MPHI), the principal shareholder of MPIC, of 4.15 billion common shares at P3 each share, a 36.8 percent discount to the closing price of MPIC shares at the PSE on Sept.18, 2009, the reference trading day for the pricing of the offer shares. These shares will be sold to qualified institutional buyers within the United States through a private placement.
The placement agreement MPIC signed with CLSA Singapore Pte Ltd and UBS AG provides for an over-allotment option of an additional 620 million common shares of MPIC held by MPHI. These shares will also be priced at P3 apiece.
The second step entails the subscription by MPHI and issuance by MPIC to MPHI of new common shares in the same number and at the same price as the shares sold during the first stage.
“Post transaction, the proposed offering will substantially strengthen MPIC’s capital structure, broaden its shareholder base and increase trading liquidity and volumes. In addition, this places MPIC as the third largest listed holding company that will have a free float of 26 percent and amongst the top 20 largest listed companies in the Philippine Stock Exchange,” Pangilinan said.
MPIC will not directly receive any proceeds in the event that the over-allotment option is exercised. Under certain conditions, however, MPHI shall subscribe to additional new common shares of MPIC at the same offer price per share, the number of which shall be up to but shall not exceed the aggregate number of option shares actually sold by MPHI as a result of the exercise by CLSA of its over-allotment option.
MPIC has set aside up to P7 billion of the total proceeds of the offering for cash acquisition costs of the 148.35 million common shares of Meralco to be acquired from the Beneficial Trust Fund of Philippine Long Distance Telephone Co. and Crogan Ltd.
Another P4.8 billion has been allotted for repayment of short-term borrowings, which were made mainly to cover the purchase of Meralco shares in open market purchases.
The remaining proceeds from the sale will go to Metro Manila Skyway System, an elevated highway crossing over the existing South Luzon Expressway.
MPIC president Jose Ma. K. Lim said the actual allocation of the net proceeds will depend on various factors including the consummation of the acquisitions of common shares of Meralco, MPIC’s proposed investment in the Skyway project, market conditions, the availability of suitable opportunities, the timing of regulatory approvals and other factors.
Lim said MPIC could use the net proceeds to invest in other infrastructure projects or assets in the Philippines or for general corporate purposes.