MPIC to pursue buyout of Ayala stake in LRT-1

February 21, 2024 | 12:00am

MANILA, Philippines — Metro Pacific Investments Corp. plans to buy out the 35 percent stake of the Ayalas in the operator of Light Rail Transit Line 1 (LRT-1) to beef up MPIC’s portfolio for its eventual bid for other railways.

MPIC chairman Manuel V. Pangilinan told reporters the company is looking to acquire the Ayalas’ stake in the Light Rail Manila Corp. (LRMC) to become its majority owner with a 70.8 percent share.

LRMC operates LRT-1, one of the busiest transport options in Metro Manila that will expand to Cavite soon.

Pangilinan said MPIC’s acquisition of the Ayalas’ interest in LRMC would raise its railway business and fortify its bid for the concession to operate and maintain the Metro Rail Transit Line 3 (MRT-3).

“I think in principle we are (keen on buying the Ayala stake in LRMC) for a number of reasons. One is the possibility of being able to bid for the MRT-3,” Pangilinan said.

MPIC earlier submitted an unsolicited proposal to manage MRT-3, but the Department of Transportation (DOTr) rejected it to gather fresh offers for the project.

Under the Marcos administration, the DOTr, led by Transportation Secretary Jaime Bautista, has shown its inclination for solicited bidding in the privatization of transport assets.

The DOTr will do the same for the operation and maintenance of the MRT-3 once the agreement with Sobrepeña-led Metro Rail Transit Corp. expires in 2025.

In January, Pangilinan declared his intent to partner with San Miguel’s Ramon Ang in bidding for the contract to handle the rail line. San Miguel Corp. (SMC) is also eyeing the operation and maintenance of the MRT-3 as it will complement the Metro Rail Transit Line 7 (MRT-7) that it is building.

Both LRT-1 and MRT-7 will link to MRT-3 once the government finishes the Unified Grand Central Station in Quezon City. This makes MRT-3 a crucial asset to take over for MPIC and SMC, as it connects to their respective railways in the north and south of Metro Manila.

Last week, Ayala Corp. chief finance officer Alberto de Larrazabal said the Ayala Group hopes to exit the railway business within the next six months as part of its divestment.

The Ayalas seek to raise $350 million from the disposal of its 35 percent share in LRMC, and are open to the idea of selling their stake to Pangilinan’s group.