Proponent of MRT-7 project buys out Republic Glass unit

By Aura Marie P. Dagcutan, BusinessWorld

Posted at Nov 10 2010 11:12 AM | Updated as of Nov 11 2010 01:07 AM

MANILA, Philippines - Universal LRT Corp. Ltd., the company that holds the right to develop the $1.2-billion Metro Rail Transit (MRT) Line 7, is buying out minority partner Hollington Management Ltd.

In a disclosure yesterday, Republic Glass Holdings Corp., the parent firm of Hollington Management, said it had signed an agreement with Universal LRT to dispose of its stake in the MRT-7 proponent.

“The entire shareholding of Hollington Management Ltd. in Universal LRT Corp. Ltd. represents about 7.80% of Universal LRT Corp. Ltd.’s total outstanding shares of stock,” Republic Glass Holdings said.

“Under the terms of which Universal LRT Corp. Ltd. purchased [the stake, this is still] subject to certain closing terms and conditions,” it added.

In a disclosure last week, diversified conglomerate San Miguel Corp. said it had acquired a 51% interest in Universal LRT, which will build the 21-kilometer railway from North Avenue in Quezon City to San Jose del Monte, Bulacan.

The listed firm’s wholly owned subsidiary, San Miguel Holdings Corp., earlier signed a share sale and purchase agreement with Universal LRT, a company owned by the group of businessman Salvador Zamora II.

The deal marked San Miguel’s latest acquisition outside of its traditional food and beverage business.

The 120-year-old food and beverage conglomerate has been diversifying into power, mining, telecommunications and infrastructure.

Mr. Zamora bought majority control of the Universal LRT consortium in 2008 from Israeli businessman Eli Levin, the rail project’s original proponent.

Officials of Universal LRT could not be reached for comment.

The Universal LRT consortium is composed of 12 companies, with Mr. Zamora owning 63% of the group after buying out Mr. Levin.

Under the firm’s plan, the MRT-7 line will have 14 stations traversing North Avenue, Elliptical Road, Commonwealth Avenue, Quirino Avenue, and San Jose del Monte.

Universal LRT got a concession from the government in June 2008.

Construction was supposed to take three-and-a-half years but has been hit by delays arising from issues such as concerns raised by affected local government units.

The firm has already awarded to D. M. Consunji, Inc., a wholly owned subsidiary of DMCI Holdings, Inc., and Japan’s Marubeni Corp. the contract for the engineering, procurement, construction, and commissioning of the MRT-7 project.

This infrastructure project is expected to further address the transportation needs of the riding public and alleviate traffic in Metro Manila, particularly going to and coming from Northern Luzon.

Metro Manila currently has three light railways: the LRT-1 line from Monumento in Caloocan to Baclaran in Parañaque, the LRT-2 from Marikina to Manila, and the MRT-3 which traverses the metropolis’ main EDSA highway from North Avenue in Quezon City to Taft Avenue in Pasay.

Republic Glass Holdings, formerly Republic Glass Corp., is a local holding company involved in purchasing, leasing and selling securities, businesses and properties.

In 2009, the company invested in Universal LRT through Hollington Management, a firm incorporated in 2006.

Its subsidiaries include RGC Investment Corp. and RGC Marine Transport Corp.