San Miguel to acquire 51% in MRT-7 rail project

ABS-CBN News

Posted at Oct 29 2010 12:32 PM | Updated as of Oct 30 2010 12:25 AM

MANILA, Philippines (UPDATED) – Diversifying conglomerate San Miguel Corp has signed an agreement to acquire a 51% stake in a train project that will link Quezon City to Bulacan province north of the capital.

In a disclosure to the stock exchange, San Miguel said it will acquire a controlling stake in the consortium that has the right to build and operate the $1.3 billion Metro Rail Transit Line phase 7 (MRT-7) rail facility.

Universal LRT Corp (BVI) Limited won the right to construct the 23-kilometer elevated electric train system in the metro and a 22-kilometer road.

The MRT-7 will be the 4th rapid transit in Metro Manila. It will run in a northeast direction, traversing Quezon City and Caloocan City, and will link to the other 3 rail lines at the integrated terminal at North Avenue station in Quezon City.

San Miguel Holdings Corp., a wholly-owned subsidiary of the conglomerate, is acquiring 51% of the 58% shares of Salvador B. Zamora II in Universal LRT Corp.

Zamora’s Tranzen Group was one of the original firms behind the consortium that won the bid for the MRT-7 project in 2008. Zamora acquired up majority control of the consortium from its original proponent Israeli businessman Eli Levin in 2008.

“Closing of the Agreement is subject to certain conditions and an appropriate disclosure shall be made upon satisfaction of such conditions,” San Miguel said in the disclosure. It did not disclose any financial details and other terms of the agreement. 

San Miguel jumped as much as 17% to a record high of P92 in heavy volume on Wednesday, ahead of the company's announcement on its latest acquisition. It closed 5.3% lower on Thursday.

Last March, San Miguel told the exchange that it has started its due diligence on the project.

The conglomerate has been diversifying from its stable food and beer business into other sectors, such as power, oil, water, mining, and infrastructure.