First Pacific, MPIC to buy stake in Thai tollroad firm

MANILA, Philippines – The Manuel Pangilinan-led Metro Pacific Investments Corporation (MPIC) and Hong Kong-based First Pacific Company Ltd are set to acquire a 29.45% stake of a toll road operator in Thailand, as part of  plans to invest in more infrastructure projects in the region.

FPM Infrastructure Holdings Ltd, which is 75% owned by First Pacific and 25% owned by MPIC, will invest P5.8 billion in Don Muang Tollway Public Company Ltd (DMT).

First Pacific will acquire a 26.2% stake worth P4.4 billion, while MPIC will shell out P1.4 billion for a 3.25% interest in DMT.

In a statement on Friday, November 15, First Pacific managing director and chief executive officer Manuel Pangilinan said the firm is now eyeing more opportunities in the infrastructure market outside of the Philippines.

“We welcome the prospect of diversifying our investments as we continue to seek strong and steady returns for our shareholders,” Pangilinan said.

This marks First Pacific’s first venture into the growing Thai market after the firm sold its stake in Thailand’s Berli Jucker Public Company Limited in 2001.

It also marks MPIC’s first investment outside the Philippines.

Thailand toll operator

The  seller of DMT’s share is a 50-50 joint venture of the Bank of Tokyo-Mitsubishi UFJ and South East Asian Strategic Assets Fund.

Other major shareholders of the toll operator are the Phanichewa Group with 37.1% and Thailand’s Ministry of Finance with 25.1% stake.

DMT operates a 21.9-kilometer, 6-lane elevated toll road that stretches from Din Daeng in central Bangkok past Don Muang Airport and on to the National Monument north of the capital.

Traffic along the toll road has increased by 10% this year as budget carriers started relocationg to the airport in October 2012.

An average of 77,000 vehicles per day pass through the original toll road during the first 9 months of 2013.

Pangilinan said First Pacific was encouraged to venture into the toll road company due to its steady and growing profitability.

“This company has been paying dividends for the past 4 years and we are pleased to see that our investment will begin immediately delivering dividends to us. We expect strong and steady growth from this investment going forward,” he said.

Another investment in Vietnam

Both firms are also planning to participate in the first public private partnership (PPP) project in Vietnam involving a $750 million Dau Giay-Phan Thiet motorway.

The 100-kilometer motorway project is being undertaken by the Vietnamese government and the World Bank as well as private partner Bitexco Group.

The 4-lane Dau Giay-Phan Thiet motorway connects the key southern cities of Ho Chi Minh and Phan Thiet, a critical link in the national north-south transport route.

The Bitexco Group  will have 60% equity in the project while the remaining 40% interest would be contributed by the government and other private investors. – Rappler.com