Tan group beefs up infrastructure capital

LT GROUP, Inc. (LTG) is infusing additional capital to its unit Asia’s Emerging Dragon Corp. (AEDC) to support its foray into infrastructure projects.
In a disclosure to the stock exchange on Tuesday, the holding firm of tycoon Lucio C. Tan, Sr. said it subscribed to P900 million worth of shares in AEDC, consisting of nine million common shares with a par value of P100 per share. The shares came from the authorized but unissued capital stock of the company, and comprise 45% of its total outstanding shares.
LTG currently has indirect ownership of the infrastructure company through its unit, Kenrock Holdings, Inc., which in turn owns majority of the common shares of AEDC. The listed conglomerate noted that it shares common directors with AEDC.
“Since AEDC is involved in infrastructure projects and is part of the proponents to the NAIA (Ninoy Aquino International Airport) project, LTG deems it necessary to support AEDC in its bid to take part in the development of the airport by infusing additional capital,” the company said.
LTG will pay an initial P225 million in cash for the transaction.
AEDC is part of the group of seven conglomerates that proposed to rehabilitate and expand NAIA for P102 billion. The others are Aboitiz InfraCapital, Inc., AC Infrastructure Holdings Corp., Alliance Global Group, Inc., Filinvest Development Corp., JG Summit Holdings, Inc. and Metro Pacific Investments, Inc.
The group named Changi Airports International Private Ltd. as technical partner.
Under the proposal, the consortium seeks to rehabilitate, upgrade, expand, operate and maintain NAIA over a period of 15 years. In two years’ time, the group aims to increase the airport’s capacity to 47 million from the current 30.5 million annually, then further bring it up to 65 million in four years.
LTG’s capital infusion followed the Department of Transportation and Manila International Airport Authority recent awarding of original proponent status to the consortium’s bid. It will now be evaluated by the National Economic and Development Authority’s Investment Coordination Committee.
After this, the proposal will undergo the competitive Swiss challenge, where other companies can make competing offers. The consortium of seven will have the right to match those offers as the original proponent.
Apart from the infrastructure sector, LTG’s core business is in beverages through Tanduay Distillers, Inc. and Asia Brewery, Inc.; tobacco through PMFTC, Inc.; banking through Philippine National Bank; and property development through Eton Properties Philippines, Inc.
LTG reported a net income attributable to the parent of P8.96 billion in the first half of 2018, 97% higher year-on-year after revenues increased by 13% to P35.56 billion. The company attributed the growth to the strong performance of its banking and property units.
Shares in LTG lost 0.26% or four centavos to close at P15.16 each at the stock exchange on Tuesday. — Arra B. Francia