Vol. XXII, No. 199 [ BusinessWorld Online ]
Wednesday, May 12, 2009 | MANILA, PHILIPPINES
DIVERSIFYING FOOD and beverage giant San Miguel Corp. is planning to put up its own fund to help build the 88.5-kilometer Tarlac-La Union Expressway, and remains on the lookout for other investments in infrastructure and energy.
"[We are looking at an] equity investment of around P2 billion to P3 billion. The amount is only small and will just come from the excess cash flow of the company," Ramon S. Ang, San Miguel president and chief executive officer, said.
San Miguel, which aims to have a controlling stake in the Tarlac-La Union tollway construction project, was approached by the Consunji-led consortium Private Infra Development Corp. in March to build the road network that will connect two major highways to provinces in northern Luzon, after terminating talks with Metro Pacific Investments Corp.
San Miguel earlier said it was conducting due diligence on the project that will complete the Subic-Clark-Tarlac Expressway and North Luzon Expressway loops.
Consunji-led DMCI Holdings, Inc. earlier said it would begin construction this year to complete the road network by 2012.
DMCI Holdings terminated talks with the Pangilinan-led Metro Pacific in January, saying the latter failed to "come up with an agreement in time for the project’s financial needs."
Mr. Ang also said San Miguel plans to join in all auctions for state-owned power assets, aside from 600-megawatt (MW) Calaca coal-fired thermal power plant in Batangas.
"[The energy sector] however will not be the priority. The company’s priority is still in its core businesses which is beer, beverage, food, packaging, and property," he said. "That’s our old business and that is our priority."
Meanwhile, Mr. Ang said San Miguel is still evaluating whether or not to buy the 17% stake of Goldman Sachs in Adaro Energy, Indonesia’s largest coal producer by market value. The stake is estimated to be worth about $500 million.
"If there is a good opportunity, we will take a look at it. Everything remains raw. [They are] also offering us a minority stake and [San Miguel is not interested in acquiring a minority stake]," he said.
Southeast Asia’s largest food and beverage giant began a major diversification strategy two years ago, acquiring stakes in Petron Corp. and the Manila Electric Co.
The company has also partnered with state-owned Qatar Telecom, Inc. to venture into telecommunications, acquiring a 20% stake in Liberty Telecommunications, Inc. It is in the process of acquiring Express Telecommunications Co.
In February, the company submitted an unsolicited proposal to the government for the development of the Laiban Dam. It has expressed interest to bid for the 600-MW Calaca plant.
Last month, San Miguel Corp. sold its beer brands and related intellectual property rights to San Miguel Brewery, Inc. for P32 billion, which would further increase the war chest of the parent company and finance various acquisitions.
Mr. Ang clarified that there is no plan to delist the beer unit.
In a separate interview, Q-Tech Alliance Holdings, Inc. President Eric O. Recto said his firm has secured funds to obtain a 19.9% stake in San Miguel Corp. from Kirin Holdings Co. Ltd. of Japan.
"The fund is in place. We know where it is coming from and also we are looking at completing [the transaction] in May," Mr. Recto said.
Kirin sold its stake in San Miguel Corp. last February to finance the purchase of a 43% stake in San Miguel Brewery. — Kristine Jane R. Liu
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