Gov’t completes takeover of MRT 3

DBP, Landbank acquire 75% MRTC stake

MANILA, Philippines—The government has completed the acquisition of a 75-percent stake in Metro Railway Transit 3 through state-owned lenders Development Bank of the Philippines and Land Bank of the Philippines in a deal worth about $800 million.

In an interview with the Inquirer at the sidelines of DBP’s Inter-Island Roll-on, Roll-off challenge in Siargao, DBP president Reynaldo David said the two government banks have jointly taken over a dominant interest in MRT 3 operator Metro Rail Transit Corp. (MRTC) by individually buying out the exposure of different groups comprising the consortium.

“Our strategy is to clean it up and fix it up for eventual resale,” said David, noting that the intention was really to privatize the key infrastructure asset.

David declined to disclose the amount of the deal due to a non-disclosure clause, but other industry sources estimated the cost of the 75-percent stake at about $800 million.

Among the private sellers were Goldman Sachs (which bought the interest of the Sobrepena family), Ayala Corp., the group of Anglo-Philippine Holdings Corp. led by businessman Alfredo Ramos, Unilab and Ramcar.

The remaining 25-percent that DBP and Landbank did not acquire were bonds 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.

Following the purchase of a 75-percent stake, David said DBP and Landbank would nominate 14 of the 15 directors making up the MRTC board.

He added that the state investment arm National Development Corp. might later on tap commercial financing to buy out DBP and Land Bank in MRT 3 and eventually privatize the 75-percent stake. –Doris Dumlao, Philippine Daily Inquirer