BDO prepares SMC’s financial resources for NAIA

The country’s largest bank is gearing up to provide financing for the P122.3-billion rehabilitation of the Ninoy Aquino International Airport (NAIA), with San Miguel Corp. (SMC) set to sign the concession for the project on March 18.

BDO Capital & Investment Corp., the investment arm of BDO Unibank Inc., will be extending the necessary loan for the SMC SAP & Co. Consortium to operate and maintain NAIA.

According to BDO Capital president Eduardo Francisco, the investment house has carefully evaluated the financial proposal of the consortium and has determined that it is feasible, despite initial concerns from some parties.

“We are arranging financing for all of their needs. We reviewed financial projections, capabilities and management plans, and also analyzed strengths of the various shareholders,” Francisco said.

The consortium, which offered the government a revenue share of 82.16 percent, will receive the necessary funding from BDO Capital. BDO is currently the largest bank in the country with an asset size of P4.11 trillion.

Some analysts and groups have raised doubts about the viability of the consortium’s offer, which includes significant upfront fees and costs for the rehabilitation and upgrade of NAIA.

The consortium plans to recover its investments through the collection of passenger service charges (PSC), which will not be shared with the government. The Manila International Airport Authority (MIAA) is considering adjusting the PSC rates in the first year of the private takeover.

However, SMC can propose adjustments to the PSC, but MIAA will ultimately have the authority to set the fares.

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