Thursday, August 6, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]
BY KRISTINE JANE R. LIU, Reporter
DIVERSIFYING conglomerate San Miguel Corp. will finalize later this month its deal with the consortium Private Infrastructure Development Corp. (PIDC) for the construction of an expressway project linking three provinces in Luzon.
PIDC vice-president for Finance Myrna C. Reinoso said the two parties will seal the agreement for the investment in the 88.5-kilometer Tarlac-Pangasinan-La Union Toll Expressway project by end of August.
The deal will mark the conglomerate’s first entry in the infrastructure business.
Ms. Reinoso said the non-binding agreement that they signed last month was more of a memorandum of understanding which still excludes crucial details like the shareholders agreement.
But once the deal is signed, Ms. Reinoso said San Miguel will officially be their partner for the tollway project, the construction of which has been moved to September or October from original date of April.
"That is already in the table. San Miguel will first acquire a 35% stake and depending on how things go [they might increase this to 51%] as we still are not even sure who will be the entity that will be coming," Ms. Reinoso said.
Ms. Reinoso said San Miguel will likely subscribe to the 35% of the P6.4-billion authorized capital stock of PIDC. The all-Filipino company on Tuesday filed for application at the Securities and Exchange Commission to reclassify its P1-billion preferred to common shares.
Later this month, the company will increase their authorized capital stock to P4.5 billion and further increase this to P6.5 billion next month, paving the way for the entry of San Miguel.
"We hope to start the construction by September. We are already working with the right of way and according to the schedule that the Department of Public Works and Highways, the right of way might be available already this month," Ms. Reinoso said.
Construction period, she said, will likely run for five years although the first half — which will run from La Paz, Tarlac to Carmen, Pangasinan — will be open to the public simultaneously with the construction of the remaining road.
The P18-billion road network is expected to cut travel time from Manila to Baguio by half. It will be San Miguel’s first venture in the infrastructure sector after investing in heavier industries like power generation and oil refinery last year.
The conglomerate’s other infrastructure plans include building a tollway that will connect Nueva Ecija to Cagayan Valley Road and together with PIDC plans to extend Rosario, La Union to Laoag City. San Miguel has also expressed interest to acquire a stake in the operations of the Subic-Clark-Tarlac Expressway from the state-led Bases Conversion Development Authority.
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