Philippine Infradev Holdings Inc. on Tuesday disclosed that it has secured additional funding for the Makati City Subway System.
This was via a $200 million credit facility part of the subscription agreement between Makati City Subway Inc. (MCSI), the corporate vehicle for the project, and Hui Gao Investments Development Ltd.
The Antonio Tiu-led listed firm said Hui Gao, under the investment agreement, agreed to indirectly or directly provide a $200 million credit facility to MCSI, and provide 51 percent of the funding needed for the completion of the $3.5 billion Makati subway project.
In a disclosure to the local bourse on Tuesday, the company also said Hui Gao agreed to subscribe to common shares amounting to 34 percent of Philippine Infradev’s adjusted shares capital for a total issue price of $102 million.
Payment for the subscription price will be made 102 days from the signing, the company said.
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“Proceeds from the investment shall be used for the construction and completion of the Makati City Subway System. Closing of the Investment shall be 60 days from today unless the parties agree on another date,” Philippine Infradev added.
Meanwhile, the company said MSCI has also executed a subscription agreement with Shanghai Mintu Investments, Ltd. for the latter’s subscription to 15 million MSCI common shares for a total issue price of $30 million.
“Finally, the company, Shanghai Mintu, and Hui Gao Investments Development Ltd. issued letters of guarantee wherein they agreed to advance or fund the cost required for the completion of the Makati Subway System based on the final cost of EPC Works determined by the contractor engaged by MCSI,” Philippine Infradev said.
The planned 11-kilometer subway is seen to connect Makati’s central business districts and other emerging business districts in the city. It will have 10 underground stations which can service 700,000 commuters a day.
The joint venture for the project was signed between Philippine Infradev and the city government of Makati in July. Target completion date for the project is around 2025.
