Tan’s AGI wants to build monorail from Fort to MRT
ALLIANCE GLOBAL Group, Inc.’s (AGI) latest push for diversification will be into the infrastructure sector, starting with the submission of an unsolicited proposal for a two-kilometer monorail project connecting Fort Bonifacio to the Metro Rail Transit Line 3 (MRT-3).
The holding firm of tycoon Andrew L. Tan on Wednesday disclosed the creation of InfraCorp Development, Inc., which will handle its investments in the infrastructure sector.
“Given the country’s strong and stable economy, we see a huge opportunity to invest in infrastructure. We are excited to participate and optimistic about the government’s aggressive push for infrastructure developments,” InfraCorp President Kevin L. Tan was quoted as saying in a statement.
InfraCorp this week submitted the unsolicited proposal for the Skytrain, which will connect Fort Bonifacio and MRT’s Guadalupe station. The monorail could potentially serve 60,000 to 100,000 passengers coming in and out of the Taguig business district every day.
Should the government approve the company’s proposal, it would take InfraCorp three years to construct the monorail, which could also connect to the subway system being planned.
“Funding of the project will be internally generated as part of AGI’s existing CAPEX (capital expenditure) program. We cannot disclose the exact amount of the investment yet until the government gives us the go-signal to proceed. We will follow the rightful process of this exercise,” said Mr. Tan, who also sits as executive director for AGI.
AGI has allotted P150 billion in capital expenditures since 2016 to fund its two-year expansion program.
The company said it will also look at transport solution projects in business districts around Metro Manila as well as in key growth areas across the country.
Sought for comment, PNB Capital and Investment Corp. President Manuel Antonio G. Lisbona said AGI’s diversification strategy will add more value to the company’s shares in the long term.
“AGI’s foray into the infrastructure space should provide additional value for the stock over the long term... What will be critical is AGI’s ability to land those infrastructure contracts especially as it will have to compete with more established names like DM Consunji, Inc. EEI, among others,” Mr. Lisbona said in a text message.
RCBC Securities’ equities trader Jeffrey Lucero, meanwhile, said the move will help improve foot traffic into the developments of Megaworld Corp., AGI’s property arm.
“The Skytrain, for instance, the terminal is planned to be in Uptown Bonifacio. This will not be an infra play to the likes of Megawide nor EEI where bulk of the revenues come from construction. The goal of AGI in making unsolicited proposals for infra projects is to help Megaworld,” Mr. Lucero said.
Aside from Uptown Bonifacio, Megaworld has several other township projects in Fort Bonifacio, namely McKinley Hill, McKinley West and Forbes Town.
The listed conglomerate has core businesses in property through Megaworld., liquor through Emperador, Inc., gaming through Travellers International Hotel Group, Inc. which operates integrated resorts and gaming casino Resorts World Manila, as well as quick service restaurants through Golden Arches Development Corp., which is the exclusive franchisee of the McDonald’s brand in the country.
AGI recorded a 7.8% decline in its attributable profit for the first half of 2017 to P6.72 billion, due to a slowdown in its liquor and gaming businesses during the period. Revenues, meanwhile, were flat at P65 billion.
Shares in AGI lost two centavos or 0.12% to P16.68 apiece at the Philippine Stock Exchange on Wednesday.