October 24, 2024 | 12:00am
MANILA, Philippines — Conglomerate Metro Pacific Investments Corp. (MPIC) is exiting the fuel logistics business, selling its entire stake in Philippine Coastal Storage & Pipeline Corp. (PCSPC) for about $148 million.
MPIC said it has entered into a definitive agreement to sell its 50 percent stake in PCSPC to an affiliate of global infrastructure investor I Squared Capital (ISQ).
Singapore-listed Keppel Infrastructure Trust (KIT), which owns the other half of PCSPC, is also selling its 50 percent stake in the company to ISQ.
In a filing, Hong Kong-based investment holding company First Pacific Co. Ltd. said that the total sale price for both the MPIC and KIT shares is approximately $296 million, in which MPIC is entitled to half of the total sale price or about $148 million, with possible additional earn-out payment of up to $25 million.
MPIC, on its end, said the transaction values PCSPC at an enterprise value of up to $510 million, subject to fulfillment of various performance milestones.
The completion of the sale is subject to regulatory approvals and other customary closing conditions.
Until then, MPIC said that KIT and ISQ would work closely with PCSPC’s management to ensure a seamless transition and continuity of operations.
MPIC plans to use proceeds from the sale to fuel the continued development of its core businesses, further strengthening its position across key sectors of the Philippine economy.
“The decision to divest is in line with our long-term strategy to focus on sectors where we can create the greatest value for the Philippines,” MPIC chairman, president and CEO Manuel V. Pangilinan said.
In late 2020, MPIC and KIT signed an agreement with infrastructure fund Philippine Investment Alliance for Infrastructure to acquire PCSPC.
MPIC initially held a 20 percent stake in the company, and was eventually increased to 50 percent.
Under the group’s stewardship, Pangilinan said PCSPC has grown into a leader in fuel storage and logistics with a strong commitment to safety and sustainability.
“The acquisition of PCSPC has been pivotal in securing safe, reliable and environmentally responsible fuel logistics for the Filipino market,” he said.
MPIC considers it appropriate to divest and realize the value of the investment at this stage.
Located in the Subic Bay Freeport Zone, PCSPC is the largest jet fuel, petroleum and sustainable fuels import terminal in the country with a storage capacity of over six million barrels.
The terminal plays a vital role in ensuring the reliable entry of liquid fuel products into the country, serving the needs of major commodity providers and other strategic interests.
“With its global expertise, we are confident that I Squared Capital will take PCSPC to the next level and ensure its continued contribution to the nation’s energy landscape,” Pangilinan said.
ISQ is an independent global infrastructure investment manager headquartered in Miami with over $40 billion in assets under management.
The company focuses on a variety of sectors, including utilities, energy, digital infrastructure, transport, environmental infrastructure and social infrastructure in North America, Europe and high-growth economies in Asia, Australia and South America.
“We are excited to acquire PCSPC, an essential infrastructure asset which plays a critical role in supporting Philippines’ growing energy requirements,” Harsh Agrawal, senior partner at ISQ, said.
“We look forward to working with PCSPC’s strong management team to enhance PCSPC’s critical role in the Philippine economy and invest further in the PCSPC platform to expand into new products and areas,” he said.
In addition to bioethanol and biodiesel, Agrawal said ISQ would focus on expanding the asset’s capabilities to handle other biofuels, including sustainable aviation fuel.
“This acquisition aligns with our commitment to investing in essential infrastructure that fosters economic growth and long-term value creation within a sustainable model,” he said.
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