NLEX operator tidying up debt before merger with San Miguel group

Metro Manila, Philippines - Businessman Manuel V. Pangilinan-led Metro Pacific Tollways Corp. (MPTC) is cleaning its balance sheet in what could be viewed as a condition for the resumption of merger talks with listed conglomerate San Miguel Corporation (SMC).

Negotiations were halted, both MPTC and SMC told the stock exchange on Monday, March 3, after newspaper reports quoted Pangilinan as saying that MPTC will first be raising funds in the next two to three months before the two parties can return to the bargaining table.

On Tuesday, March 4, MPTC’s top executive echoed Pangilinan’s remarks.

“We want to bring down the debts of this company and raise more equity from private investors in order to merge with San Miguel,” MPTC President and CEO Jose Ma. K. Lim told reporters in a chance interview on the sidelines of a groundbreaking ceremony organized by the listed tollway operator.

Lim took over MPTC just last March 1, a day before the company implemented a regulator-approved significant toll hike covering the North Luzon Expressway (NLEx). MPTC is the concessionaire for this tollway. Its current portfolio of tollways also counts the Subic-Clark-Tarlac Expressway (SCTEX), the Manila-Cavite Toll Expressway (CAVITEX), Cavite-Laguna Expressway (CALAX), Cebu-Cordova Link Expressway (CCLEX) and the NLEX Connector Road (NLEX Connector).​

The San Miguel group, which also confirmed that the merger talks have been shelved, meanwhile controls the Tarlac-Pangasinan-La Union Expressway, South Luzon Expressway, STAR Tollway, Skyway, NAIA Expressway, and the Muntinlupa-Cavite Expressway.

Lim was responding to journalists’ query if MPTC will consider deferring the NLEx toll hikes amid calls from some quarters, including a trucker group.

“Actually, we’re still catching up on our toll rates. And it's affecting our ability to build faster because we’ve had to borrow money effectively to replace the lost revenues because we can’t get tariffs. To the point that NLEX needs to bear down debt,” Lim said.

The Toll Regulatory Board has yet to receive a formal petition to suspend the NLEx toll increase, but it had earlier said that the March round represents 50 percent, or the first tranche, of the toll rate adjustments it granted to the NLEx operator in 2022.

The second tranche will take effect in 2026.