Ayala Group to sell LRMC stake

MANILA, Philippines — Ayala Corp., the country’s oldest conglomerate, is looking to sell its stake in Light Rail Manila Corp. (LRMC) as part of the realignment of its asset portfolio, according to its top official.

“Some investors have expressed interest in our share in Light Rail Transit-1. We are open to this as part of our portfolio realignment,” Ayala Corp. president and CEO Fernando Zobel de Ayala told The STAR.

Ayala Corp.’s AC Infrastructure Holdings Corp. has a 35 percent stake in LRMC, which operates and maintains LRT-1 since September 2015 through a P65-billion 32-year concession agreement with the Light Rail Transit Authority (LRTA).

LRMC is a joint venture, led by Metro Pacific Investments Corp.’s Metro Pacific Light Rail Corp. (MPLRC). Its other members include Sumitomo Corp. and the Philippine Investment Alliance for Infrastructure’s Macquarie Investments Holdings (Philippines) Pte Ltd.

In 2014, LRMC signed a concession agreement with the Department of Transportation and the LRTA for the P65-billion LRT 1 Cavite Extension, Operation & Maintenance project, which is part of the 2011 to 2016 Philippine Development Plan to accelerate infrastructure.

Zobel, who took over the helm of Ayala as CEO in April last year, said the conglomerate has decided to focus on fewer businesses after a decade of expansion.

Ayala’s core businesses are banking, telecommunications, property, and most recently, renewable energy.

Zobel has said the company would be focusing on expanding these businesses rapidly.

In the area of infrastructure, Ayala wants to focus on logistics instead of traditional infrastructure such as expressways. It acquired a 60 percent stake in Air21, owned by businessman and former Customs commissioner Alberto Lina for roughly P6 billion.

Last week, Ayala Corp. signed an agreement with the Villar Group’s Prime Asset Ventures Inc. for the sale of its 100 percent stake in MCX Project Co. Inc., the corporation that holds the concession assets, rights and obligations under the concession agreement for the Muntinlupa-Cavite Expressway Project (MCX).

MCX is a new four-kilometer four-lane toll road, from the junction of Daang Reyna and Daang Hari in Las Piñas/Bacoor, Cavite to SLEX through the Susana Heights Interchange in Muntinlupa, traversing the New Bilibid Prison (NBP) Reservation.

The link-road uses the Susana Heights Interchange as exit and entry from north and south of SLEX. The project included the construction of a new bridge/widening of the existing bridge crossing SLEX, as well as the expansion of the Susana Heights toll plaza. Its commercial operations commenced in July 2015.

The sale of MCXPCI is aligned with Ayala’s strategic priority to realize value from certain non-core assets and sharpen its focus on the continued expansion of its core businesses in real estate, banking, telecommunications and power, and scaling up its emerging businesses in healthcare and logistics.

In addition, the transaction supports Ayala’s target to raise $1 billion from value realization initiatives by 2023, which is executed through a combination of strategic partnerships and divestment of certain non-core assets. The proceeds will be used to fund future investments and further strengthen the company’s balance sheet,” Ayala said.

The acquisition bodes well for the Ayala Group especially with its real estate, retail and commercial developments dominating Las Piñas, which is called Villar country in the business grapevine.