Tuesday, July 21, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]
SAN MIGUEL Corp. has formally expressed its interest to join the consortium that will build the 88.5-kilometer Tarlac-La Union Expressway, a road network that will cut travel time to northern Luzon.
In a disclosure, San Miguel said it had entered into a non-binding agreement to acquire a significant stake in the Private Infrastructure Development Corp. (PIDC), a consortium of construction companies behind the Tarlac-Pangasinan-La Union Toll Expressway Project.
"This is in line with our diversification plans and we’re happy to be a catalyst for the infrastructure needs of the country," San Miguel President Ramon S. Ang said in a statement yesterday.
Mr. Ang noted that the northern and central Luzon stretch is a "potentially dynamic industrial corridor" and the proposed expressway will make it easier and cheaper to move goods and people from one point of Luzon to another.
"As a food and beverage conglomerate with one of the most developed distribution networks in the country, we have a strong interest in making it happen," Mr. Ang said.
The expressway project will extend from La Paz, Tarlac to Rosario, La Union. Once completed, the expressway will cut by half the travel time from Manila to Baguio.
San Miguel said it had agreed to execute and finalize a definitive agreement, which would be subjected to government approval.
It was unclear whether San Miguel would acquire a majority stake in the project but D. M. Consunji, Inc. President Jorge A. Consunji said in an interview that investors have yet to thresh out details of the deal.
"Significant could mean 35%. Right now, we cannot give the exact figure since we have yet to [discuss that]. San Miguel is still reviewing [the project]," Mr. Consunji said.
Mr. Ang has earlier expressed his intention to acquire up to 51% of PIDC, saying San Miguel might invest P2 billion to P3 billion on the project as it continues to be on the lookout for potential investments in infrastructure and energy.
San Miguel was approached by the Consunji-led consortium to build the Tarlac-La Union road network after the latter ended talks with Metro Pacific Investments Corp.
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."
Earlier this month, San Miguel said it was also interested to acquire a stake in the operations of the Subic-Clark-Tarlac Expressway from the state-led Bases Conversion Development Authority.
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 Telecoms Holdings, Inc. It is in the process of acquiring Express Telecommunications Co.
On top of these, San Miguel has also submitted an unsolicited proposal to the government for the development of the Laiban Dam.
San Miguel "A" shares, exclusive to locals, yesterday gained 0.84% or P0.50 to P60 apiece while its "B" shares, open to all investors, lost 0.82% or P0.50 to close at P60 each. — Kristine Jane R. Liu
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