MPIC raises $200M via equity placement

MANILA, Philippines - Infrastructure conglomerate Metro Pacific Investments Corp. (MPIC) has generated about P8.9 billion in fresh funds through an overnight equity placement and plans to raise up to P10 billion more through borrowings to support infrastructure investments in the country and refinance obligations.

The company, led by business titan Manuel V. Pangilinan, told the local bourse yesterday it raised $200 million following the placement of 1.81 billion in new MPIC shares priced at P4.90 each.

The deal involved MPIC’s major shareholder, Metro Pacific Holdings Inc. (MPHI), lending a portion of its existing shares for sale to investors. In turn, it will subscribe in the same number and at the same price which the shares were sold.

MPIC said the conduct of an equity fund raising through the placing and subscription transaction allowed the company to raise equity funds “in a most expeditious and efficient manner, with the least cost to MPIC, for use in its debt repayments, expansion and acquisition projects.”

MPIC said the placement managed by UBS AG Hongkong was conducted overnight and garnered strong interest from institutional investors in Asia especially within the Philippines, as well as Europe and the US.

Following the transaction, MPHI’s economic interest in MPIC was reduced to 52.13 percent from 55.8 percent.

“With recent developments in our new investment in Vietnam, accelerating progress in the Philippines in our roads, specifically the SCTEX, together with rail and further PPP opportunities ahead of us we decided now was the time to embark on an equity raising,” said Jose Ma. K. Lim, said MPIC president and chief executive officer.

The MPIC shares were sold at a discount to Monday’s closing price of P5.24 per share and a 2.75-percent discount to MPIC’s 30-day volume weighted average share price.

“As one of MPIC¹s largest shareholders, we are very pleased with this announcement today as the net proceeds from the debt and equity transactions will help enable Metro Pacific to simplify and increase its exposure to Meralco, to eliminate the higher cost debt at its Beacon affiliate and to fund its other new initiatives,” said Steven J. Quamme, senior managing director of US-based investment manager Cartica Management, LLC.

Aside from the proceeds from the transaction, MPIC said it is also gearing up for more borrowings to raise up to P10 billion more in fresh funds.

“We are also in the process of raising P10 billion of new borrowings at MPIC. Our overall objectives are supporting expansion and reducing our relatively high cost debt in our affiliate, Beacon Electric Asset Holdings; this will enhance the cash flow at MPIC itself,” Lim said.

MPIC said it would use the net proceeds from the placement, together with up to P10 billion of new borrowings, for reduction of “relatively expensive” debt at Beacon amounting to P5.1 billion, as well as investment in previously announced projects and general corporate purposes.

“To the extent MPIC does not use the net proceeds for the purposes described above, MPIC may use the proceeds to invest in other infrastructure projects or assets in the Philippines or for general corporate purposes,” the conglomerate said.

MPIC serves as the local unit of Hong Kong’s First Pacific Co. Ltd. and is into power distribution (Manila Electric Co.), water utility (Maynilad Water Services Inc.), toll roads (Metro Pacific Tollways Corp.) and healthcare (MPIC Hospitals Group).