Metro Pacific Investments Corporation (MPIC), one of the largest infrastructure investment management and holding companies in the Philippines, has taken on a new strategic partner in operating a vital rail infrastructure system in Metro Manila. MPIC on May 29 announced the sale of a 34.9% stake in its subsidiary Metro Pacific Light Rail Corporation (MPLRC) to Sumitomo Corporation of Japan for about 3 billion pesos (US$59.3 million) in cash.
MPLRC has an aggregate 55% economic interest in Light Rail Manila Corporation (LRMC), which has a 32-year concession from September 12 2015 to operate, maintain and extend the 20.7km LRT-1, an important light rail infrastructure asset in the heart of Metro Manila. LRT-1, which currently has 20 stations, has started works on the extension of the system to the province of Cavite.
With the sale, Sumitomo joins the other partners of MPIC in the LRT-1 project, namely, AC Infrastructure Holdings Corporation and Macquarie Investments Holdings (Philippines). Sumitomo will become beneficially interested in 19.2% of the issued and outstanding capital stock of LRMC.
MPIC, on the other hand, will remain beneficially interested in 65.1% of the issued and outstanding capital stock of MPLRC following the closing of the transaction.
It is expected that the partnership with Sumitomo would contribute to the efficiency of MPLRC’s current operations and assist LRMC as it continues with the heavy works on the Cavite extension project. The partnership would also enhance the ridership experience for the passengers LRMC serves and would provide the necessary support to ensure that Phase 1 of the Cavite extension would be delivered as soon as possible.
Macquarie Capital and SyCip Salazar Hernandez & Gatmaitan acted as advisers of MPIC, which will use the sale proceeds for its working capital requirements.