Mit-Pacific Infrastructure Holdings Corp. of Japan’s Mitsui Corp. is reducing its stake in Metro Pacific Investments Corp. (MPIC).
Hong Kong-based First Pacific Co. Ltd., the parent company of MPIC, said in a disclosure to Hong Kong Stock Exchange its Philippine flagship firm signed an agreement with Mit-Pacific.
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Under the deal, MPIC will buy back 4.577 billion common shares owned by Mit-Pacific, representing 7.3 percent of MPIC.
This will cut Mit-Pacific’s stake in MPIC to 7.8 percent, while MPIC’s shares in the company will increase to 49.9 percent.
MPIC also agreed to issue exchange bond to Mit-Pacific worth P11.9 billion.
The exchangeable bond can be converted into 1.495 billion common shares in Metro Pacific Tollways Corp. (MPTC), the tollways arm of MPIC.
The buyback of shares and the issuance of exchangeable bond are inter-conditional and will occur simultaneously at the closing. MPIC owns 99.9 percent interest in MPTC.
If Mit-Pacific opts to exchange the bonds into MPTC shares, it will get a 6.6-percent interest in the tollways company and will be entitled to a board seat in the MPTC board.
MPIC’s stake in MPTC will then go down to 93.6 percent.
The strategy not only facilitates the buyback but also allows MPIC to retain liquidity while optimizing its asset portfolio.
“The transaction would deepen strategic cooperation between MPIC and Mit-Pacific at operational level, whilst maintaining collaboration across the group,” First Pacific said.
MPTC is a leading toll road operator in the Philippines, managing several major expressways that are vital for transportation and economic growth in the region.
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