Ayala Corp. could generate between $350 million to $400 million from the divestment of water and railway assets it no longer controls.
The amount, Ayala Corp. chief finance officer Alberto M. de Larrazabal said, is part of the $1 billion divestment plan the company announced more than two years ago and now in its final phase of implementation.
According to him, this results from the sale of more than 20 percent remaining Ayala Corp. stake in Manila Water Co., the east zone concessionaire, the railway and other minor assets.
The Manila Water firm is now controlled by billionaire Enrique K. Razon Jr.
“I can’t speak on his (Razon) behalf but he’s extremely committed to the business. He sees the potential. He’s always indicated (to us) the desire to consider (selling to him) if and when we sell,” he said.
De Larrazabal explained that while Razon does not have the right of first purchase, he is considered a partner “so we will obviously take that into consideration.”
On the Light Rail Manila Corp. that currently operates LRT lines 1 and 2, De Larrazabal said the assets have attracted the interest of private equity and other investors after it secured the government green light to adjust its fare matrix.
The LRMC is operated by a group led by businessman Manuel V. Pangilinan who has indicated the intent to acquire Ayala Corp.’s residual interest in the railway.
De Larrazabal said Ayala Corp and Pangilinan are not anywhere close to a final decision one way or the other but the hope is to seal an agreement within the next four to six months.
“Clearly within the year” in any case, he said.
On the competing bid by businessman Manuel B. Villar Jr. to acquire the Ayala stake in LRMC, De Larrazabal said they have had “casual conversations.”
“We have to understand that’s his property at the end so he also has a natural interest in this. But we’ve not had really serious conversation,” he acknowledged.
Villar-led Prime Asset Ventures Inc. has proposed to acquire the right to develop and extend the 11-kilometer Light Rail Transit-1 extension project by seven additional stations all the way to Silang, Cavite. The ongoing LRT-1 extension projects ends at the Niog Station in Bacoor, Cavite.
Villar, the country’s richest person, claimed the project is doable and gave assurance of prompt acquisition of right-of-way (ROW) for the railway. ROW issues have since plagued the construction of the elevated railway.
It was noted the Metro Pacific Investments Corp. and Ayala Corp. partnership may find it difficult to extend the line further into Cavite because of right of way issues.
Villar said the ROW should not be a problem since he owns the land where the railway traverses.
