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MPIC, KIT to acquire petroleum storage facility

By Arjay L. Balinbin, Senior Reporter

METRO PACIFIC Investments Corp. (MPIC) has partnered with Keppel Infrastructure Trust (KIT), a business trust listed in Singapore, to acquire a company that operates the “largest” petroleum products import terminal in the Philippines, the former announced on Wednesday.

In a disclosure to the stock exchange, MPIC and its partner said they entered into a sale and purchase deal with the Philippine Investment Alliance for Infrastructure to acquire the Philippine Coastal Storage & Pipeline Corp.

The Philippine Investment Alliance for Infrastructure is a 10-year closed-end fund managed by Macquarie Infrastructure and Real Assets.

MPIC said it would initially hold a 20% stake in the parent firm of the Philippine Coastal Storage & Pipeline, the Philippine Tank Storage International Holdings, Inc., for a purchase consideration of $67 million. KIT will indirectly hold 80% of the shares.

The Philippine-based unit investment holding company of the First Pacific Co. Ltd. said it is discussing with its partner to give MPIC an option to increase its interest in the Philippine Coastal Storage & Pipeline “up to 50%.”

MPIC Chairman Manuel V. Pangilinan noted the 150-hectare facility is a vital energy infrastructure for the Philippines, as it accounts for 36% of the total import terminal storage requirements of the country.

The facility is located in the Subic Bay Freeport Zone. It is the “largest independent storage facility in the Philippines with a storage capacity of approximately 6.0 million barrels, when it completes an expansion in early 2021,” MPIC said.

Mr. Pangilinan said MPIC and its partner “look forward to further expanding” the facility’s capacity to provide Filipinos with “added energy security.”

“Through this investment, MPIC will be able to diversify its portfolio and revenue streams in a new industry vertical with strong growth potential,” the Philippine-based firm said.

MPIC also noted the Philippine Coastal Storage & Pipeline generates “stable cash flows via take-or-pay contracts with high quality off-takers.”

Keppel Infrastructure Fund Management Pte Ltd, the trustee-manager of KIT, said the acquisition of the Philippine Coastal Storage & Pipeline would “grow and strengthen” the resilience of the business trust’s distributable cash flow.

The acquisition “presents an attractive opportunity for KIT to capture opportunities arising from the strong macroeconomic outlook as well as robust growth fundamentals for imported petroleum products in the Philippines,” said Matthew Pollard, chief executive officer of Keppel Infrastructure Fund Management.

MPIC reported core net earnings of P2.4 billion for the third quarter, lower by 37%  from a year ago.

The company anticipates its full-year core net income to end at a little over P10 billion, down from its P15.6-billion finish last year.

MPIC shares closed 3.52% lower at P4.39 apiece on Wednesday.

MPIC is one of three Philippine subsidiaries of Hong Kong’s First Pacific Co. Ltd., the others being PLDT, Inc. and Philex Mining Corp. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., maintains an interest in BusinessWorld through the Philippine Star Group.

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