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Manila's MPIC buys stake in CII B&R to increase company's profitability

Update: January, 15/2015 - 09:15
The HCM City Infrastructure Investment Joint Stock Company and the Manila-based Metro Pacific Investments Corporation sign the purchasing contract on January 14.— Photo cafef.vn
HA NOI  (VNS) — Metro Pacific Investments Corp. (MPIC) yesterday said its subsidiary entered into an equity investment and financing transaction with HCM City Infrastructure Investment Joint Stock Company (CII).

Through the transaction, Metro Pacific Tollways Corp. (MPTC) will secure a significant minority equity interest equal to about 45 per cent of the outstanding capital of CII Bridges and Roads (CII B&R) "through a combination of purchase of CII B&R secondary shares from CII, and subscription to VND (Vietnamese dong) -denominated bonds to be issued by CII, which are exchangeable into secondary shares in CII B&R."

MPTC is purchasing 30 million secondary shares of CII B&R from CII at VND22,100 (US$1.03) per share and is subscribing to 1,020,000 bonds with a face value of VND1 million ($47) or 56,666,667 shares of CII B&R.

The VND1.954 trillion ($91.54 million) transaction is expected to "enhance profitability and strengthen the balance sheet" of MPIC, according to the disclosure.

CII's investment activities are focused on infrastructure, road and bridge construction, clean water production, industrial zone infrastructure, real estate, and equity investment, according to its website.

Le Quoc Binh, general director of CII, told local media that the sale was as per CII's restructuring plan, adding that it chose the Filipino partner because they both work in the same area and can take advantage of the technology.

Binh added that his company will keep at least 51 per cent of the stake in CII B&R. Among CII's five subsidiaries, CII B&R is the most important one. It owns and operates seven construction projects in HCM City and plans to invest $1.7 million in nine other construction projects. — VNS

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