Hong Kong — Metro Pacific Investments Corp. (MPIC) has revived plans to secure strategic investors for its tollways business in a bid to ease its significant debt burden.

Chaye Cabal-Revilla, MPIC chief finance, risk, and sustainability officer, said the conglomerate is seeking to sell a 20 percent to 30 percent stake in Metro Pacific Tollways Corp. (MPTC) to a strategic partner.

“There’s two levels of private placement that we’re actually looking at,” Cabal-Revilla said in a media briefing, referring to a placement for the Indonesian unit (PT Metro Pacific Tollways Indonesia) and another at the domestic MPTC level.

New investors could acquire 20 percent to 30 percent stakes in each of the two units, she said, adding that the final percentages “really depend on the valuation” and the need for MPIC to “partner with like-minded organizations in terms of ‘fit-and-click’ to the group.”

Cabal-Revilla noted that a prior attempt to sell a 20 percent stake in MPTC to a foreign strategic investor was shelved after “geopolitical issues happened.” The prospective investor, Mitsui & Co. of Japan, was named by MPIC Chairman and CEO Manuel V. Pangilinan in April, when he stated the company hoped to raise ₱30 billion to ₱50 billion from the placement.

“So, we are still going to continue to do that. It’s the same process, same terms,” Cabal-Revilla added.

MPTC’s consolidated debt, including its exposure in Indonesia, stands at approximately ₱200 billion, with a ₱80 million portion of that debt sitting at the MPIC parent level, Cabal-Revilla said.

Pangilinan stressed that reducing MPTC’s debt is a prerequisite for pursuing the company’s planned initial public offering (IPO) or a proposed merger with San Miguel Corp.’s tollways unit.

“We have a few things to fix in the tollways group, both here [Philippines] and in Indonesia. Mainly the high level of debts in both cases,” Pangilinan explained. “Before talks with San Miguel become serious, we have to fix our financial position so that the two of us have a stronger position to talk… For now, our main focus is managing the tollways better and strengthening [the] balance sheet.”

MPTC President and CEO Gilbert Sta. Maria said an IPO is “not on the horizon yet,” but noted that the company is working on debt reduction.

“Watch this space. I think we will fix the problem and, once we’ve done that, then we should do an IPO,” Sta. Maria said.

Despite the high debt level—which Sta. Maria stated is “quite large” and believes is the most debt within MPIC—he stressed, “this is not a debt disaster scenario at all by far." He added that the company is currently extending the maturities of its liabilities.

“We're well within all our banks’ covenant standards. Our debt-to-equity ratios, our debt-to-EBITDA ratios, our debt coverage ratios, they're all within standard. We're quite comfortable with where they are but we're not comfortable with how much money is going to the banks that's why we need to fix our debt,” Sta. Maria said.

Reducing debt and interest payments will ultimately allow the company to remit dividends to the parent company, he added.