| THE Lopez-controlled Benpres Holdings Corp. (BHC) plans to sell its 17.5- percent stake in Manila North Tollways Corp. (MNTC), the concession for the North Luzon Expressway, via a secondary offering. In an interview, BHC chief finance officer Salvador Tirona said the unloading of the company’s equity in MNTC is a primary option to raise funds for debt repayment.
To date, BHC’s outstanding debts amount to $400 million.
No price has yet been mentioned for the equity in MNTC.
The plan, Tirona said, has become more feasible with the backdoor listing of MNTC by virtue of City Resources (Phil.) Corp., a listed company controlled also by the Lopez group.
Shareholders of City Resources approved in its annual meeting last Friday, the company’s renaming to First Phil. Infrastructure Inc. and will entirely own First Phil. Infrastructure Development Corp., the parent firm of MNTC.
“Through this listing, we can now determine the proper market price for our shares in MNTC and this will certainly become an outlet for generating funds,” Tirona said.
However, the proposed sale of BHC’s stake in MNTC will still not suffice to wipe out the company’s debts, according to Tirona.
“That one combined with [the sale of] some other assets, will probably reduce our debts into half. The balance we hope to restructure over time,” Tirona said.
Getting out of MNTC is consistent with the plan of BHC to divest exposure in certain noncore businesses. Last year, BHC sold its 49-percent equity in Corporate Information Systems Inc. to Meralco as settlement of liability.
As a result of a 79-percent rise in net equity earnings of various units, BHC reported a higher net profit of P4.21 billion for 2006 from P732 million a year earlier.
In its annual report filed with the stock exchange, the company said equity in net earnings amounted to P4.49 billion as First Philippine Holdings Corp. (FPHC) generated earnings from the initial public offering of First Gen Corp. in February 2006.
Another contributor was the favorable Supreme Court ruling on Meralco’s tariff unbundling case.
Without these gains, BHC’s net income would have been P2.2 billion.
Meanwhile, the company’s consolidated revenues grew two percent to P17.39 billion last year from P17.05 billion in 2005.
The holding firm’s units have all reported positive financial results for 2006.
ABS-CBN Broadcasting Corp., for one, said last year’s gross revenues inched up two percent to P17.39 billion from P17.05 billion, while net income grew to P741 million.
FPHC, the holding firm for all the power assets of the Lopez family, registered consolidated revenues of P59.57 billion from P53.26 billion in the same comparable period. Net income was higher at P8.70 billion from P4.91 billion.
Meralco, on the other hand, reported a net income of P13.88 billion in 2006, a turnaround from its restated net loss of P207 million in 2005.
MNTC likewise improved its gross revenues by 12 percent to P5.8 billion in 2006. Its net operating income of P2.023 billion is also higher than the P1.976 billion in the same comparable period.
Telecom unit Bayan reported that total revenues grew 10 percent to P7.57 billion from P6.89 billion. Net operating revenue was almost flat at P4.78 billion compared to P4.72 billion, while net income of P974 million was a turnaround from a loss of P541 million.
SkyCable, for its part, pared its losses to less than half of budget, after successfully renegotiating programming costs and benefiting from the reorganization that began in 2001.
Property arm Rockwell Land also posted higher revenues at P2.9 billion, due to higher revenue recognition. Revenues recognized from condominium sales amounted to P1.834 billion, 23-percent higher than P1.49 billion in 2005.
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