Metro Pacific clarifies funding amid drop in share price
MANILA, Philippines – Leading infrastructure conglomerate Metro Pacific Investments Corporation said it has no plans of conducting capital raising activities to finance its aggressive expansion plans.
Metro Pacific clarified this to the Philippine Stock Exchange (PSE) after its share price dropped significantly this month due to speculations that it plans to raise funds through the capital markets.
"It has come to our attention that there is increasing speculation in the market that Metro Pacific Investments Corporation will conduct a capital raising exercise in the near term," the Manuel V. Pangilinan-led conglomerate said in the disclosure.
"Please be informed that [Metro Pacific] management has decided that it is not necessary for [Metro Pacific] to conduct a capital raising exercise in the near future."
The conglomerate said its continued expansion will be funded through a combination of internal resources and external borrowing. (READ: Metro Pacific to spend around P60 billion in 2017)
From P6.90 each at the start of the month, the share price of Metro Pacific dropped to P6 on Wednesday, March 22.
Double capital spending
Metro Pacific earlier said it will nearly double its planned capital expenditures this year to P79 billion from P40.5 billion in 2016 as the group accelerates expansion of its power, tollways, water, and hospital businesses.
Of the P79-billion programmed spending, P24 billion has been allotted for Metro Pacific Tollways Corporation (MPTC), P22 billion for Manila Electric Company (Meralco), P13 billion for Maynilad Water Services, and the remainder for other units including hospitals, railway, and logistics.
Funding, however, will come from internally generated funds, borrowings, and the possible selldown in its stake in Maynilad.
For MPTC, it plans to break ground on 4 big-ticket projects over the next two years: the P19-billion Cavite Laguna Expressway, the P27.9-billion Cebu-Cordova bridge project, the P12.7-billion C-5 Link Expressway, and the P21.8-billion connector road project that will link the North Luzon Expressway and South Luzon Expressway.
For Maynilad, this year's P13.2-billion programmed spending will primarily be used for its water and wastewater infrastructure projects as well as for water sources and water loss recovery projects.
The group's hospital business is also looking to acquire 15 new hospitals over the next 5 years to achieve its target of 5,000 beds. It is also studying plans to build its first greenfield hospital.
Meralco is also doubling its capital spending this year to P22 billion from P11 billion in 2016, as it starts building power plant projects. – Rappler.com