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By Likha C. Cuevas-Miel, Reporter
Metro Pacific Investments
Corp.(MPIC) will embark on a recapitalization program to
give it elbow room to take on more acquisitions and beef up its
portfolio of investments, the company announced Monday.
In a briefing, company executives
said MPIC will be increasing its authorized capital by P7.4 billion
to P12 billion, divided into 7.35 billion common shares at par value
P1.00 each and 5 billion preferred shares at P0.01 shares.
According to Jose Ma. K. Lim,
MPIC president and chief executive, said this creation of voting
preferred shares, which will be available only to Filipinos, will
allow for more foreign participation in the company “while
ensuring Filipino nationality.”
From the increase, parent firm
Metro Pacific Holdings Inc. (MPHI) will be converting some MPIC
notes worth P2.03 billion that are equivalent to 1.89 billion
shares. These debt notes issued by the company to MPHI, which
represent the minimum subscription of the increase in authorized
capital, were used fund its acquisition of Maynilad and Makati
Medical last year.
The increase in capitalization
would also allow the company to jack up its stake in Maynilad. On
Monday, MPIC shareholders approved MPHI’s stock subscription of up
to 3.79 billion MPIC shares at P2 per share. From this, about 1.57
billion shares would then be used to acquire the convertible notes
issued by Bidco, the DMCI-MPIC Water Co. consortium that owns
Maynilad, held by First Pacific Co. Ltd, the parent firm of MPHI.
These convertible debt papers are
equivalent to 10.3 percent equity interest worth US$57 million in
the consortium. Also part of the 1.57 billion shares to be issued
will be used to buy 34 percent of Davao Doctors Hospital Inc.
equivalent to P500 million.
From MPHI’s total stock
subscription, 2.22 billion new common of these that are equivalent
to $100 million or P4.44 billion will be used to acquire Ashmore
Investment Management Ltd.’s economic interest in Bidco. Another
$40 million worth of shares held by Ashmore will be bought by MPIC
through interest-bearing shareholder advances, which will be repaid
in the future through a possible stock rights by MPIC within this
year. After this, MPIC will end up with Ashmore’s 24.2 percent
economic interest in the parent firm of the water company.
After the sale and purchase
transaction on July 7, MPIC would have invested $197 million in
Bidco on top of the $60 million it shelled out for its existing
ownership in DMCI-MPIC Water Co. This would then bring MPIC’s
stake in the consortium to 55 percent while the rest is held by DM
Consunji Inc.
These series of share issuances
are “a convenient way” to acquire assets without resorting to
loans. Manuel V. Pangilinan, MPIC chairman, said they are “averse
to acquisitions by way of debt” and they would rather go for
acquisition through equities.
This year, the company is also
working towards acquiring one or two hospitals, to increase the
number of beds under its management from 830 hospital beds to 1,000.
Pangilinan said MPIC is also
eyeing three mining opportunities and hopes to close one or two
deals by year-end.
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