HARBOUR Centre Port Terminals, Inc (HCPTI) will go it alone at the North Harbor, saying it has enough capital to carry out the port’s modernization.
HCPTI, which owns 65% of joint venture firm Manila North Harbour Port, Inc (MNHPI), said it has P1.8 billion in standby fund (P700 million in equity and a credit line of P1.1 billion) to finance port modernization in the next two years.
MHNPI, which holds the 25-year management and operation contract for North Harbor, is 35% owned by Metro Pacific Investment Corp (MPIC).
It may be recalled that MPIC’s desire to acquire controlling shares in MNHPI sparked the ownership tiff between the joint venture partners. MPIC chair Manuel Pangilinan had said the company will pull out if it did not get its wish. HCPTI refused to budge, saying it would instead buy out MPIC for P350 million and refund all guarantees and investments made by MPIC in MNHPI.
After Thursday’s Special Board Meeting of the Philippine Ports Authority (PPA), HCPTI president and chief executive Michael Romero said the P1.8-billion standby fund is enough for MNHPI to honor its contract commitments. (It must be noted though that the P1.1 billion is care of MPIC.)
“The Romero family can do it on its own. But it will be up to the family to get a partner, if needed,” Romero said. “There are four groups that have shown interest to be our new partner but as of now, we will run the port as a single entity.” No details were given on the interested parties.
The PPA Board earlier required HCPTI and MPIC to each show proof of financial capability to determine whether the surviving entity in the joint venture can fund the port modernization program, roughly costing P14.5 billion. The bulk of the funds will be spent within the first six years of the contract.
PPA said it will cancel the MNHPI contract if HCPTI does not convince the Board it has the financial muscle.
“The PPA Board needs to resolve this issue. But I don’t think it will result in cancellation of the contract. They just need to resolve the issue as soon as possible,” Constante Fariñas, PPA’s Port Manager for North Harbor, said.
Fariñas also confirmed MPIC has already informed the PPA Board of its intent to pull out of the partnership if it fails to secure a controlling stake.
Romero: MPIC needed us
In a letter to PPA general manager Oscar Sevilla early last week, HCPTI claimed MPIC needed the Romeros’ help to get into port development. This is an apparent swipe at reports MPIC’s financial muscle was the main reason the port contract was awarded to MNHPI.
“We respectfully submit that the project could not have been awarded to MNHPI were it not for the compliance by HCPTI with all the requirements set by the PPA, more particularly on the financial capability of HCPTI,” Romero said in his letter.
Based on MPIC’s 2006 financial statement, HCPTI said MPIC had debts of close to P4.5 billion on assets of under P900 million. In the same year, HCPTI had less than P200 million in debt and over P2 billion in assets.
“Accordingly, at the time of the bidding, HCPTI was even more financially capable than MPIC,” Romero reasoned.
“We wish to assure your good office that the sale and transfer of MPIC shares to HCPTI will not prejudice the project,” he said.
