Infrastructure firm Citra recently announced that it was expanding its toll assets and other infrastructure-related businesses here and in Indonesia.
In the Philippines, it has submitted an unsolicited proposal for the P50-billion, 17.7-kilometer Manila-Taguig Expressway. In Indonesia, it said it would raise as much as $3.8 billion to fulfill the equity commitment in planned tollroad projects.
The company also announced that Cayman Islands-registered Padma Funds was now its majority shareholder with a 76.5-percent stake in Citra Marga Nuphasala Persada.
But let’s take a closer look into the numbers and data, and see if these claims would pass muster with fact-checkers.
Citra’s publicly available records show that Padma Funds is not the majority shareholder of the company as the latter claimed. Major shareholders registered are BNP Paribas and Hamka. Incidentally, Hamka questioned Citra’s sale of its stake in its Philippine toll unit in 2013. Padma, it appears, is misrepresenting Citra. Or is it really the owner?
Financially—and contrary to what it is trying to project—Citra may not be in a position to undertake such grand and ambitious expansion plans. How can it finance projects worth $4.8 billion (or P250 billion) with an annual net profit of only $39 million, or the equivalent of about P2 billion?
This sounds all too familiar. In fact, its inability to fund its share of capital for its Philippine venture earlier resulted in the dilution of its equity stake to a mere 5 percent.
“That Citra expansion story that recently came out is one of those few stories where there is much more than meets eye,” one jaded industry insider said. “The deception Citra is employing to fool investors, partners and creditors cannot be understated.”
Citra’s grand Philippine and Indonesian expansion plan is something that’s worth greater scrutiny.
“They are selling and telling lies, and they would most probably end up failing to deliver again on its infrastructure fairy tale,” the same insider added. Wow. This looks like the start of a war in the infrastructure sector. Watch this space, folks. —DAXIM L. LUCAS
Younger Romero scores
If readers think the lack of news about the feuding Romeros—the father, Reghis II, versus the son, Mikee—is over, think again. Just because there’s sparse news about the father-son megafight doesn’t mean it doesn’t exist.
Biz Buzz learned that it was merely dormant for a few months, and is set to explode onto the scene once more, with a vengeance.
Recently, we learned that the Court of Appeals had stopped Reghis II and his group from representing themselves as owners of Harbour Centre Port Terminal Inc. (HCPTI), basically affirming the Dec. 1, 2016, order of the Pasig Regional Trial Court.
According to the camp of the younger Romero, the higher court ruling effectively gave the son the upper hand in the continuing battle over ownership of the family-owned company.
It will be recalled that in 2011, under two separate deeds of assignment, the elder Romero—through his companies R-II Holdings Inc. and R-II Builders Inc.—divested itself from HCPTI after fully and completely transferring and conveying 403,799 shares and 285,459 shares, respectively, or a total of 689,258,653 shares to Harbour Holdings.
Combined, the shareholdings divested by Reghis II represented 68.11 percent of the total issued and outstanding capital stock duly assigned and transferred by the father in favor of Harbour Holdings.
There is no final and executory decision issued by any competent court annulling or reversing the existing majority ownership of Harbour Holdings at HCPTI, according to Mikee’s camp.
The Court of Appeals resolution of Jan. 12, 2017, stated that after a review of the appeal filed by Reghis II and his group, it found “no cogent reason to deviate from [its] previous finding and ruling that there is no indication whatsoever that any grave abuse of discretion attended the proceedings. The issuance of the [injunction] by the trial court was based on the evidence presented during the hearing and the pleadings filed by the parties. Further, the allegations in their motion are mere rehash and had already been passed upon by this court in its decision of May 12, 2016.”
The cased involved the order issued by the Pasig court in favor of One Source Port Support Services Inc. which was granted a preliminary injunction to prevent the father from representing themselves as owners of HCPTI and “to cease and desist from further disrupting and interfering with the plaintiff’s peaceful management, control, operations and possession of the terminal facility located at Manila Harbour Center.”
One Source Port was tapped by son Michael Romero in 2007 to render port ancillary services and services management to HCPTI’s 10-hectare Manila port facility.
Of course, knowing that this isn’t the last word on this long-running issue, our readers should stay tuned for the other side’s reply. —DAXIM L. LUCAS
Healthcare race
Since its debut in the healthcare business some 10 years ago, the group of businessman Manuel V. Pangilinan, aka MVP, has now built a network of 13 hospitals, the latest component of which is Dr. Jesus C. Delgado Memorial Hospital (JDMH) in Kamuning Road, Quezon City.
This means that not a year passes by that at least one new hospital hasn’t been added to its portfolio, all by means of acquisition rather than building any new structure from scratch. After all, there are many medical centers out there founded and run by families or groups of doctors in need of fresh equity and change in business model to unlock efficiency.
Metro Pacific Hospital Holdings Inc. (MPHHI) headed by executive Augie Palisoc now has a portfolio of 3,000 beds—of which 2,000 are in Metro Manila and the remaining 1,000 in the provinces. JDMH thus becomes MPHHI’s eighth hospital in Metro Manila, joining Makati Medical Center, Asian Hospital, Cardinal Santos Medical Center, Manila Doctors Hospital, De Los Santos Medical Center, Our Lady of Lourdes Hospital and Marikina Valley Medical Center. Outside Metro Manila, MPHHI has five hospitals, namely: Davao Doctors Hospital; Riverside Medical Center in Bacolod; Central Luzon Doctors’ Hospital in Tarlac; West Metro Medical Center in Zamboanga, and Sacred Heart Hospital in Malolos, Bulacan.
The portfolio also includes a primary care clinic, Megaclinic in SM Megamall, and two healthcare colleges—Davao Doctors College and Riverside College in Bacolod.
One could say that the group has met the scale it targeted years ago to justify an eventual initial public offering.
Three years ago, sovereign wealth fund Government of Singapore Investment Corp. has committed to come in as strategic partner in Metro Pacific group’s hospital business where it was given the option to acquire an interest of as much as 39.9 percent.
But healthy competition is likewise arising as far as the acquisition of existing hospitals is concerned. In several instances in the recent past, we heard that MVP’s group faced stiff competition with another group that is likewise building a chain of healthcare hubs and is also backed by a group with strong financial muscle. It’s not the Ayala group, which has taken the greenfield route in developing its chain of healthcare centers in partnership with the Mercado medical group and has also gone down to the communities by putting up retail clinics combining pharmaceutical and medical services under the brand “Family Doc.”
The competitor we’re talking about is the Campos family’s Mount Grace Hospital Ventures Inc., which—according to the grapevine—has beaten MVP’s group in the bidding war for some hospitals up from grabs. We’ve also seen Mount Grace testing the government’s public-private partnership framework a few years ago with its interest to bid for the Department of Health’s Orthopedic Center project (eventually won by the lone bidder, a consortium led by Megawide group).
Mount Grace, of course, draws synergy from the pharmaceutical business of its principal investor, the Campos family. The Unilab group is now a leading pharmaceutical company in Southeast Asia with annual revenue exceeding $3 billion, including those from its overseas production sites. The pharmaceutical giant is a growing Filipino multinational corporation, now with at least six factories in the Philippines, two in Indonesia, and one each in Vietnam and Thailand.
We heard that Mount Grace is working on a further synergy-building or prospective unified promotion/branding for its chain of healthcare centers. There are now 10 under the Mount Grace umbrella: Medical Center Manila (Manila Med), Tagaytay Medical Center, VRP (Victor R. Potenciano) Medical Center, Westlake Medical Center, The Good Samaritan Hospital System Inc., Mary Mediatrix Medical Center, Health Serv Medical Center, Mother Theresa of Calcutta Medical Center, Grace General Hospital and Fe del Mundo Medical Center.
So next time that a fairly sizeable hospital is on the block, we can expect who the bidders will be. —DORIS DUMLAO-ABADILLA |
by Land Asia Listings
