By Denise A. Valdez, Senior Reporter
LISTED Philippine Infradev Holdings, Inc. is issuing shares to the local government of Makati City as part of its Makati City Subway Project.
In a disclosure to the exchange on Tuesday, the company said the Securities and Exchange Commission approved its application for the valuation of its convertible preferred shares.
The company will issue 656,655,400 convertible preferred shares valued at P6.57 billion to be paid for Makati properties, which have a total appraised value of the same amount.
“The issuance of 656,655,400 convertible preferred shares of the corporation… is pursuant to the joint venture agreement for a Public-Private Partnership to construct, establish, manage and operate the Makati City Subway Project,” it said.
The preferred shares will be transferred to the local government of Makati City, the company’s joint venture partner for the subway project, Philippine Infradev President and CEO Antonio L. Tiu told BusinessWorld in a text message. This also means the company now has ownership of the Makati properties to be covered by the subway.
In 2018, the board of directors of Philippine Infradev approved increasing its authorized capital stock by up to P19.5 billion, from which it may issue shares through private placements and other arrangements. In October 2019, the board approved a P7.22-billion subscription agreement with the Makati City government in relation to their joint venture for the subway project.
Philippine Infradev is building a $3.5-billion (about P169.44 billion) subway that will traverse the central business district of Makati City. The project will have 10 stations stretched across 10 kilometers across the city.
In September, the company signed a $1.21-billion (about P58.58-billion) engineering, procurement and construction contract with China Construction Second Engineering Bureau Co. Ltd. for the subway project.
Originally scheduled for completion in 2025, the subway is expected to carry about 700,000 passengers daily and reduce road traffic in the business district.
Shares in Philippine Infradev closed at P1.30 apiece on Tuesday, down 10 centavos or 7.14% from the last session.