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AEV looks to use debt, equity in bid for Mactan Airport means BUSINESS

MANILA - Aboitiz Equity Ventures Inc. will use a combination of debt and equity to finance its joint bid for the P10-billion Mactan-Cebu International Airport Project.

AEV and Ayala Corp. earlier announced that they would are teaming up for the airport project.

Stephen Paradies, AEV chief finance officer, told reporters late Thursday that it will not be a walk in the park for the two conglomerates especially with the likes of Metro Pacific Investments Corp. and San Miguel Corp. expected to vie for the contract to construct a new world-class passenger terminal building and operate and maintain the old and new facilities.

"There a lot of parties interested so I'm sure it will be a competitive bid," Paradies said, adding that AEV and AC will likely bring in one foreign airport operator to join its consortium.

AEV's focus is on the Mactan Airport at the moment and no concrete plans have been put in place to explore other government infrastructure projects, Paradies said.

The exclusive strategic partnership with the Ayalas is also limited to the airport project, he added.

The two conglomerates earlier signed a memorandum of agreement to form a 50-50 joint venture company that will serve as their vehicle to bid for and develop the country’s second largest international gateway.

Both parties will enter into a definitive agreement once the terms of reference for the project have been finalized and published by the government.

The government is expected to announce before the end of the year the bidding for the Mactan Airport, one of the Aquino administration’s public-private partnership projects.

Paradies said AEV is on track to at least match last year's performance after posting a 16 percent growth in consolidated net income to P11.8 billion in the first half.

"So far, our first half numbers were above last year. [We are on track] to at least meet last year's [profit]," said Paradies.

AEV's earnings at end-June was more than half of its consolidated net income of P21.2 billion in 2011, which showed a decline of 3 percent from a year ago.

After recording a 20-percent drop in its profit share, AEV sees its food business contributing to growth amid a recovery in the second semester, said Paradies.

The Aboitiz Group is involved in power generation and distribution, banking, food production, construction, shipbuilding and land development.