Despite political unrest, MVP group hikes stake in Thai toll road firm

MANILA, Philippines – The current political turmoil in Thailand is not a deterrent to the Manuel Pangilinan group’s widening reach as Metro Pacific Investment Corporation (MPIC) is increasing its stake from 7.36% to 29.45% in Thai toll road firm Don Muang Tollway Public Company Ltd. (DMT).

“MPIC has reached a stage of development where it is ready to take its infrastructure expertise regionally. We very much look forward to seeing MPIC’s new focus on its regional infrastructure ambitions,” Pangilinan, MPIC chairman, said. Pangilinan is managing director and CEO of MPIC’s parent, Hong Kong-based First Pacific Company Ltd.

The Thai toll road is Metro Pacific’s first-ever investment outside the Philippines. Such infrastructure investments are planned as Metro Pacific leverages the experience and expertise it developed in its Philippine businesses and bring them to new jurisdictions.

“Thailand offers a level playing field and a regulatory regime that welcomes investment,” Metro Pacific president Jose Ma. K. Lim said, drawing a contrast with MPIC’s inability to obtain mandated toll adjustments from Philippine regulators.

Lim added that he has seen no disruptions to DMT’s operations in Thailand’s current political climate.

Thailand has been in deadlock since 2006, when the military ousted Prime Minister Yingluck Shinawatra’s brother, Thaksin Shinawatra, in a coup. While both Shinawatras have strong support from rural and northern areas, many in the middle class and urban elite responsible for anti-government movement, oppose them.

“Although Thailand is experiencing some political uncertainties just now, we remain committed to seeking further investment opportunities there as the Kingdom has progressed well over the years despite such uncertainties,” he said.

First Pacific said in a statement that it would sell its 75% interest in FPM Infrastructure Holdings Ltd. (FPM) to unit MPIC for $101.25 million. FPM’s sole asset is a 29.45% interest in DMT.

Metro Pacific, which currently has investments in water and electricity distribution, healthcare, and toll roads, already owns 25% of FPM and the transaction will raise its stake to 100% while raising its economic interest in DMT to the full 29.45%.

DMT, which has a 27-year concession ending 2034, operates a 21.9-km., 6-lane elevated toll road stretching from Din Daeng in central Bangkok past Don Muang Airport and on to the National Monument in the north of the capital.

“We are very impressed with the quality of the DMT management. The road achieved in excess of 13% traffic growth in 2013, ahead of our expectations, and we are confident that the tariff increase due at end of this year will go ahead as planned,” Lim said.

The acquisition will be funded using internal resources and borrowings. The transaction is expected to be completed July 31, 2014. – Rappler.com