SMC, Tan tie up for Cebu airport bid

MANILA, Philippines - Diversified conglomerate San Miguel Corp. (SMC) is expanding its partnership with tycoon Lucio Tan to pursue a joint venture for the P17.5-billion Mactan-Cebu International Airport project.

SMC corporate information officer Ferdinand Constantino informed the Philippine Stock Exchange (PSE) that the company is set to form a consortium with the Lucio Tan Group of Companies to bid for the project that is part of the Aquino administration’s public private partnership (PPP) program.

“The company and the group of Mr. Lucio Tan are forming a consortium with the intention of participating and jointly submitting a competitive bid for the Mactan-Cebu international airport expansion project under the PPP program of the government,” Constantino said.

In April last year, SMC bought into national flag carrier Philippine Airlines (PAL) after Trustmark Holdings of the Tan Group entered into investment agreements with a unit of SMC wholly-owned subsidiary San Miguel Equity Investments Inc. (SMEII) for the acquisition of a 49-percent interest in PAL Holdings.

SMC infused $500 million to buy into PAL and affiliate budget carrier Air Philippines Corp. (AirPhil) through its 49-percent interest in publicly held PAL’s parent firm PAL Holdings Inc.

The investment was made through SMEII. Under the agreement, Trustmark and Zuma Holdings and Management Corp. – the holding companies of PAL and AirPhil – would issue new shares to SMEII.

Earlier, SMC and PAL president and chief operating officer Ramon S. Ang said it was putting on hold its planned $6-billion international airport that would serve as an alternative to the congested Ninoy Aquino International Airport (NAIA) due to unclear policy from the Department of Transportation and Communications (DOTC).

The DOTC has set April 5 as the deadline for the submission of prequalification documents for the Mactan-Cebu international airport project.

The tandem of SMC and the Tan Group would compete head on with the joint venture of infrastructure conglomerate Metro Pacific Investments Corp. (MPIC) and JG Summit Holdings Inc. of taipan John L. Gokongwei Jr. that controls budget

airline Cebu Air Inc. (Cebu Pacific) as well as publicly-listed Megawide Construction Corp. and infrastructure giant GMR Infrastructure Ltd. of India.

Aside from SMC and Tan’s MacroAsia Corp., other companies that have expressed interest in the project include Lopez-owned First Philippine Holdings Corp. (FPHC), Premier Airport Group care of retail magnate Henry Sy’s SM Investments Corp., Aboitiz Land, Inc., Filinvest Development Corp. of taipan Andrew Gotianun, and Prime Power Holdings Corp.

Aside from those that bought invitation documents, several companies including Seoul-based Samsung C&T Corp., Malaysia Airports Holdings Berhad (MAHB), auditing firm SG&V Co., Macquarie Infrastructure and Real Assets (Singapore) Pte Ltd, Changi Airports International, and French-owned Aeroport de Lyon have inquired about the project.