by Kevin Rozario (London, United Kingdom)
Philippines infrastructure investment group Aboitiz InfraCapital (AIC) is buying into GMR Megawide Cebu Airport Corporation (GMCAC), the developer and operator of Mactan-Cebu International Airport (MCIA). The signing of this key agreement—which will take place in two stages—was announced September 2.
The deal comes after several months of deliberations and will see AIC acquire 33.33% of the shares in GMCAC (minus one share). The purchase of the stake will be made through a combination of what Aboitiz called “a primary infusion” and secondary purchase of shares from Megawide and from GMR Airport’s local vehicle GAIBV (GMR Airports International BV) for a total consideration of 9.5 billion Philippine pesos ($167million).
GMCAC will use a portion of the cash injection to acquire specific entities that provide services at MCIA, which is located on Mactan Island and serves the central region of the Philippines.
Simultaneously with the above transaction, Megawide and GAIBV have agreed to issue exchangeable notes to AIC for the aggregate amount of 15.5 billion Philippine pesos ($273 million). The notes will mature on October 30, 2024, and will be exchanged by AIC for the remaining 66.66% (plus one share) of GMCAC’s outstanding capital stock. GMR Infrastructure Limited will continue to provide support as the technical services provider to GMCAC.
The deal, as always, is subject to customary closing conditions including the necessary third party and regulatory approvals.
Building the Philippines’ “premier international airport”
According to a statement from Aboitiz, the deal will “propel MCIA to the next level and establish its status as the Philippines’ premier international airport.” Manila’s government-owned Ninoy Aquino Airport (MNL) is the busiest international gateway in the Philippines handling 47.9 million passengers in 2019, with MCIA ranked a distant second, peaking at 12.7 million annual passengers pre-pandemic.
As the only operational privately developed and managed international airport in the country, MCIA is in a good position to resume its pre-COVID double-digit growth as the industry enters into a recovery period.
Aboitiz is a well regarded investor with deep roots in the Cebu region. AIC already operates the Mactan economic zone 2 estate in Lapu-Lapu City, a mixed use industrial park; and the West Cebu Estate (WCE) in Balamban, Cebu, the country’s shipbuilding center.
With its vast experience in Cebu, Aboitiz Group has some big ambitions for its newest pet project…