Gov’t sale of NLEX stake seen as good policy move

THE government’s plan to sell its stake in NLEX Corp. will help raise revenues and allow it to better exercise oversight, analysts said.

The Finance department earlier announced its plan to dispose of P2.5 billion worth of assets this year. Included in the government’s disposition plan is its 3.46% stake in NLEX Corp., which it plans to unload by the third quarter.

Data from the Privatization Management Office showed that the disposition is still subject to third-party valuation. The plan is expected to be endorsed to the Privatization Council within the month.

Finance Secretary Benjamin E. Diokno said the disposition was driven by the need to raise more revenues for priority projects and clear any “stagnant assets.”

Transportation expert Rene S. Santiago said in a Viber message that the disposition is a “good policy move” as this would help the government avoid conflict of interest.

“The government will still be able to exercise oversight over NLEX operations through its regulatory agency, the Toll Regulatory Board, to ensure reasonable rates to tollway users,” Terry L. Ridon, convenor of infrastructure think tank InfraWatch PH, said in an e-mail.

The disposition will also help raise government revenues.

“With the government’s limited fiscal space, disposing its shareholdings in various corporations will allow it to raise significant amounts of cash to fund its programs and projects. It should, however, ensure that it gets the best price in the disposing of its shares,” Mr. Ridon said.

“Proceeds would help increase government revenues, though one-time, and contribute to improving the fiscal position,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Mr. Ridon also noted that the company may also consider buying back its shares through a share buyback program.

“It will allow the tollway operator to further consolidate its control over its operations,” he said.

Analysts also noted that the government’s stake is minimal and will not impact the firm.

“The government’s stake is relatively small, way below controlling stake. [It could] be sold at an attractive price or valuation, at least fair,” Mr. Ricafort said.

Mr. Santiago said that “the equity is too small to even merit a board seat.”

“It should have no real impact on its project timelines to complete the NLEX Connector Road, and its other important initiatives within its tollway network,” Mr. Ridon added.

The second segment of the NLEX Connector Road is set to be completed by the end of June, NLEX Corp. earlier said.

NLEX Corp. is part of Metro Pacific Tollways Corp., the tollway unit of Metro Pacific Investments Corp. (MPIC).

MPIC is one of three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Luisa Maria Jacinta C. Jocson