MacroAsia to tap LT firms to support Sangley financing

MANILA, Philippines — MacroAsia Corp. is bringing in other members of the Lucio Tan empire onboard the Sangley Point International Airport (SPIA) to provide additional financial muscle.

“With the scheme of things, MacroAsia is part of a larger group. So if our partners agree and the province agrees, we may bring in other parts of our group,” MacroAsia president and chief operating officer Joseph Chua said.

“With permission of our group members, maybe PAL (Philippine Airlines) or other parts of our group can join in. LT Group is possible. It’s up to my boss and other shareholders,” he said.

LT Group Inc. is one of the country’s biggest conglomerates with businesses in banking through Philippine National Bank (PNB), tobacco through PMFTC, liquor through Tanduay Distillers Inc., property development through Eton Properties Philippines Inc., and beverage through Asia Brewery Inc.

The Tan family is also behind the country’s flag carrier PAL as well as publicly-listed MacroAsia, an aviation-related services company which is involved in various businesses such as aircraft maintenance, repair and overhaul, catering, ground handling, and water.

The Tan-led Asia’s Emerging Dragon Corp. is also part of the group seeking to rehabilitate, operate, and expand the congested Ninoy Aquino International Airport (NAIA).

“Airport is also aviation in a sense right. We have ground handling, catering, maintenance, and water (in MacroAsia). Airport is a bigger amount involved. It’s infrastructure, but I would say we’re doing it also to help our aviation group,” Chua said.

MacroAsia and China Communications Construction Co. Ltd. (CCCC) have been awarded by the provincial government of Cavite the $4-billion first phase of the SPIA, a project involving the development of an interim first runway with an annual design capacity for 25 million passengers and the new Sangley connector road and bridge.

Chua said the MacroAsia has 40 percent stake in the consortium, while CCCC contracts 60 percent.

At present, he said MacroAsia has yet to finalize how it would raise capital for its portion in the project.

“The capex is quite big. We don’t want to issue shares because it’s dilutive. If you look at our financial statement we’re pretty much under leveraged so we will go through debt, bonds,” Chua said.

The consortium has been given 60 days to comply with all post qualification requirements before an official signing of a joint venture contract with the Cavite government is made.

“We have to come up with the definitive agreement with the province. How long that would take I cannot answer myself because we’re only 40 percent. CCCC will have to talk to them. It’s just that we don’t want to bother them (CCCC). They’re having some problems at the moment,” Chua said, referring to the coronavirus outbreak in China.

The Cavite government said the consortium has the right to first offer for the $6 billion second phase development of the massive airport project.

The second phase of the SPIA will expand the development for a second runway, with an annual design capacity for 75 million passengers. 

‘For phase two, whatever Cavite government decides, we will support. It’s going to be a mutual agreement. I think it’s a win-win project not only for Cavite but for the entire country,” Chua said.