Government may raise ownership in MRTC from 75% to 100%

MANILA, Philippines – The government may opt to secure a 100-percent stake in the once-privately held Metro Rail Transit Corp. (MRTC) after it has already acquired a 75-percent controlling stake through state-owned banks Development Bank of the Philippines (DBP) and the Land Bank of the Philippines (Landbank), a Finance official has said.

This developed as the official said the government is eyeing to buy-out DBP and Landbank by the end of October, possibly through the issuance of bonds by the National Development Corp. (NDC), the state-owned investment arm.

MRTC operates the MRT-3 which runs from North Avenue in Quezon City to Taft Avenue in Pasay City.

A Finance official said the government may opt to increase its stake by going after the securities that were sold by the previous MRT-3 owners, which represents the remaining 25-percent ownership of the railway consortium.

“One of our options is 100-percent ownership,” the official said.

A 100-percent control in the MRT-3 would enable government to manage it better and eventually prepare it for reprivatization.

The remaining 25 percent that were in the form bonds are held by private creditor-banks – including Philippine Bank of Communications, Bank of Commerce and United Coconut Planters Bank – which chose to hold on to these securities.

Early this year, Landbank and DBP acquired majority control of the MRT-3 by shouldering 50-50 of the purchase cost estimated to be worth between $800 million and $900 million.

The Finance official said the government is eyeing to buy out Landbank and DBP possibly through a bond issuance by the NDC.

The partial take-out would involve payment of the portion of the principal investment plus interest, according to the finance official.

MRTC is previously majority owned by a holding company, MRT Holdings Inc., a consortium that originally consisted of Ayala Land Inc., Anglo Philippines Holding Corp., Fil-Estate Management Inc., Ramcar Inc., and Greenfield Development Corp.–Iris C. Gonzales, Philippine Star