METRO Pacific Investments Corp. (MPIC) is merging its toll ways-related companies to consolidate and strengthen its capability to fund large-scale expansion projects.
In a disclosure to the Philippine Stock Exchange on Tuesday, MPIC said the board of Manila North Tollways Corp. (MNTC) has approved the merger with Tollways Management Corp. (TMC).
MNTC will be the surviving entity after the merger, and remain a subsidiary of MPIC.
MNTC will assume all respective rights, businesses, assets and other properties as well as the debts and liabilities of TMC.
MNTC is the concessionaire for both the North Luzon Expressway and the Subic-Clark-Tarlac Expressway. It is also one of the original proponents for the Connector Road Project linking North Luzon Expressway and South Luzon Expressway.
TMC is engaged in operating and maintaining toll ways facilities, interchanges and related works.
Rodrigo Franco, president and CEO of MNTC parent Metro Pacific Tollways Corp. (MPTC), noted the merger would result in a more efficient operations and better financial standing that would benefit consumers.
The merger will be submitted for approval of shareholders of MNTC next month.
TMC shareholders will have the option to receive either shares of stocks of MNTC or non-voting, cumulative and redeemable preferred shares of MNTC with a coupon rate of 7 percent.
They will be given 2.7 MNTC common shares for every TMC share and 16.63 MNTC preferred shares for every TMC share, but not both common and preferred MNTC shares.
The merger is subject to regulatory approvals, including the Philippine Competition Commission, and will take effect 15 days after the Securities and Exchange Commission has approved the Articles of Merger.
“We will have to submit ourselves to the process,” Franco said, noting that they see no major obstacle in acquiring the approval from PCC.
MPIC does not expect the merger to result in higher earnings for MPIC’s toll roads business, but will increase MNTC’s leverage capacity for expansion projects.
On Tuesday, MNTC inaugurated the expanded NLEX Bocaue toll barrier in time for the All Saints’ Day on Tuesday.
“The project is part of MNTC’s continuing commitment to provide motorists with fast, safe and convenient travel and more importantly, value for money in terms of greatly enhanced facilities and services,” Franco said.
The average daily traffic at the NLEX Bocaue toll plaza is 218,000 vehicles, and is expected to increase by 10 to 15 percent during the All Saints’ Day weekend.
The toll barrier was expanded from 26 lanes to 38 lanes to accommodate higher traffic volume for the holidays. The additional eight lanes – composed of four manual lanes, two Easytrip lanes and two mixed lanes – were built at a cost of P287 million.