The city government of Makati agreed to subscribe to P7.22 billion worth of convertible preferred shares in Philippine Infradev Holdings Inc., the proponent of the Makati City Subway System.
Philippine Infradev, a listed company led by businessman Antonio Tiu, said it would issue P7.23 billion worth of convertible preferred shares to the local government unit in exchange for the land that it would contribute to the subway system.
The company said in a disclosure to the stock exchange it signed a subscription agreement with the Makati City government pursuant to the joint venture agreement for the construction, operation, and management of the Makati City Subway System.
Under the agreement, Makati agreed to subscribe to 722,320,940 million preferred shares of the company with a total par value of P7.22 billion in exchange for real estate properties owned and to be contributed by the LGU to the subway project.
Philippine Infradev said to maintain its 100-percent ownership in Makati City Subway Inc., it would be the one, instead of Shanghai Mintu Investments Ltd., to subscribe to the 15 million common shares of MCSI for a total issue price of $30 million.
MCSI is the corporate vehicle that would undertake the construction, operation, and management of the Makati City Subway System.
Philippine Infradev earlier said two Chinese firms would contribute $332 million to mobilize the development of the $3.7-billion Makati intra-city rail transport system.
Under the subscription agreement, Hui Gao Investments Development Ltd. will subscribe to shares representing 34-percent stake in MCSI’s adjusted shares capital for $102 million. It will also provide a $200-million credit facility to MCSI and committed to finance 51-percent of the total funding needed for the completion of the project.
Shanghai Mintu also agreed to subscribe to 15 million common shares of MCSI for $30 million.
The Makati subway project is an 11-kilometer intra-city mass transport system with up to 10 stations that will connect key points in Makati’s two districts with no cash out from the city government.
Once completed, it is expected to accommodate up to 700,000 passengers per day aboard six-car trains
Philippine Infradev tapped China Civil Engineering Construction Corp. for the construction of the project. CCECC is a 100 percent owned subsidiary of China Railway Construction Corp. Ltd.
