SYDNEY, Australia—Metro Pacific Investments Corp. (MPIC), a conglomerate that is into most profitable businesses in the Philippines, said it will make its maiden bond offering next year and may list its hospital unit by 2019 as part of its fund-raising activity for capital expenditures.
David Nicol, the company’s CFO, said the company will offer some P10 billion in bonds next year to fund part of the firm’s P100-billion capital spend for 2018.
Nicol said the company will submit a P30-billion shelf registration with the Securities and Exchange Commission—possibly later this year, he added—and only use a third of it immediately.
“We are talking with the ratings agencies. We have a ‘Triple-A’ rating, and then we didn’t issue bonds. But we reached a point where the level of bank debts in the projects we’re taking on is outstripping the ability of the banking system to come and cater for us,” Nicol said during MPIC’s annual briefing with reporters held here.
“Next year, MPIC’s funding commitment is P30 billion, to [be] put into subsidiaries. In fact, we have a debt line available for that,” he added. “But I think, for a minimum, we will do a shelf registration of about P30 billion to give flexibility, but I think we are going to draw P10 billion of that next year.”
Nicol last week said the company is looking at a P100-billion capital spending next year and forms part of MPIC’s mammoth P820-billion spending in the next five years.
Of the amount, P653 billion will go to committed projects and the rest to prospective ones the company is looking into, which include biogas, logistics and water projects outside the concession areas of subsidiary Maynilad Water Services Inc.
Meanwhile, MPIC may sell as much as 45 percent of its stake in the hospitals group, part of it by listing the group on the Philippine Stock Exchange by 2019.
Nicol said MPIC may sell a significant percentage of its stake in the hospital business to the market, while its partner Government of Singapore Investment Corp. (GIC) is also willing to give up some of the shares it already owns. In 2014 GIC, the Singaporean government sovereign fund, bought into MPIC’s hospital business by as much as 39.9 percent.
“We agreed with our partner GIC that this is something we are determined to do. I think we want to stay the dominant shareholder in the play. A lot of the goodwill of the business had been buildup, partly on the back of Metro Pacific behind it. And so, we’re not looking to exit the thing,” Nicol said. “So I would still see us holding the over 45 percent of it. So [there] may be 15 percent sell-down together with GIC. So that will be an incredible float together with GIC; something of 30 percent.”
MPIC is also disposing some of its stake in Maynilad Water Services Inc. But the conglomerate led by tycoon Manuel V. Pangilinan still has to complete the deal.
At the moment, more than half of MPIC’s income comes from power, 23 percent from toll roads, 20 percent from water and the rest from hospitals and others.
By 2021 its power-business contribution will be reduced to 42 percent, tollroads would contribute 34 percent and water, 15 percent.
“What was very clear is the board is very determined to keep the portfolio broadly at its shape, shave down a little bit a part of the group but not to go back to the market to raise more equity at the MPIC level,” Nicol said. “As you know, we are running a protest with Maynilad, which is taking a while. Part of [the reason] I think the resolution on the regulatory issue is taking a while. But as that is coming to a close, I think we are getting closer to announcing a selldown.”