MVP Group capex to hit P36.3 B this year

SINGAPORE — Infrastructure conglomerate Metro Pacific Investments Corp. (MPIC) is jacking up its capital spending by a third to P36.3 billion this year to support expansion plans of its operating units.

This forms part of the P73.2 billion capital expenditures allotted by the Hong Kong-based First Pacific Co. Ltd. for its Philippine operations this year, executives said.

“MPIC itself will spend P36.3 billion across the portfolio for capital expenditures this year,” MPIC chief finance officer David J. Nicol said in a briefing.

Nicol said the budget is higher than the P27.2 billion the company spent last year.

Specifically, the holding firm led by businessman Manuel V. Pangilinan allotted P17.2 billion for Maynilad Water Services Inc., P2.6 billion for Metro Pacific Tollways Corp. (MPTC), P12.9 billion for Manila Electric Co. (Meralco), P1.5 billion for the healthcare group and P2.1 billion for smaller projects of the parent firm, Nicol said.

In total, the Pangilinan Group will spend P73.2 billion for its local businesses, with P28.6 billion for Philippine Long Distance Telephone Co., P8.1 billion for Philex Mining Corp. and P200 million for Philex Petroleum Corp.

The massive spending for MPIC will be supported by recently completed and future equity capital raising and borrowings.

MPIC has P24.55 billion available for equity in new projects of its units, Nicol said.

Late last month, MPIC raised P6.12 billion after majority shareholder Metro Pacific Holdings Inc. sold 1.33 billion shares to support projects of the toll road, water and hospital businesses, and for the participation in the public-private partnership (PPP).

Nicol said the company will still have to raise P6.8 billion for its equity in expansion programs.

Distribution utility Meralco is set to re-enter the power generation while Maynilad will improve its bulk water supply and distribution network.

For toll roads, MPTC will pursue the eight-kilometer North Luzon Expressway (NLEx) Harbour Link, improve the 14-kilometer Manila-Cavite Expressway, and bid for the NAIA Expressway and the 47.02-kilometer Cavite-Laguna Expressway, Nicol said.

The healthcare group will acquire more hospitals this year, starting with a Central Luzon-based hospital, said MPIC president and CEO Jose Ma. K. Lim.

Aside from toll roads, MPIC is interested in other PPP, the flagship economic project of the government including the $1.307-billion Light Rail Transit 1 South Expansion in May.

“We also intend to participate in the automated fare collection system under a 50-50 partnership for the rail, real estate and ticketing with Ayala Group,” Lim said. Lim said MPIC is in talks with Japanese and Korean technical providers for the $43-million project that supports the mass transit system in Metro Manila.

MPIC will also participate in the auction for the P17.5-billion Mactan-Cebu International Airport project.

“MPIC can now resume talks with foreign firms that own airlines,” Lim said, adding that the government has relaxed rules allowing airline owners to join the bidding for the expansion and operation of the airline.

Several companies including San Miguel Corp., Gokongwei-led JG Summit Holdings Inc., and the tandem of Ayala Corp. and Aboitiz Equity Ventures Inc. have expressed interest in the airport project.

In the nine months to September, MPIC’s net income attributable to equity owners of the parent firm surged 45 percent to P4.99 billion from P3.44 billion a year ago.

MPIC earlier announced a full-year core earnings outlook of P6.3 billion for 2012, which is 23 percent higher than the P5.1 billion a year ago.