San Miguel’s P100B annual cash more than enough to bankroll P750B Bulacan airport
San Miguel Corp. is going all in on its P750 billion Bulacan airport project as it committed to give its full backing to its subsidiary, San Miguel Holdings (SMH), which will build the unsolicited proposal.
In a statement, San Miguel said it concurred with Finance Secretary Sonny Dominguez’s suggestion that it should undertake a Joint and Several Liability Agreement for the proposed four-runway, one terminal airport over a 2,500-hectare property in Bulakan town.
San Miguel noted that the project would be built over a period of 5-7 years to full completion. “On average, spending spread is about P100 billion which is at the level of the company’s cash from ooperating aactivities on a simple annualized basis. There is a substantial debt space to supplement the cash requirements of the company for its priority projects including those of the other businesses,” said San Miguel.
San Miguel claimed that as early as May 2018, when the project was approved by the National Economic and Development Authority (NEDA) Board, it had told the Department of Transportation its plan to sign the joint undertaking as soon as the final concession agreement was approved.
In the Senate hearing, Dominguez revealed that he suggested to the DOTr that San Miguel back up SMH which, he believed, was unlikely to bankroll the project on its own.
He claimed that a representative of President Rodrigo Duterte commented in an April 2018 meeting that “the financial capacity of the proponent corporation should be the one evaluated and not the financial capacity of the mother company backing the proponent corporation.”
Dominguez had questioned San Miguel’s capacity to infuse P200 billion in equity “which we are not sure is going to happen” considering that the Public-Private Partnership (PPP) project proponent only has P60 billion total equity in 2016.