By Jenniffer B. Austria

The Securities and Exchange Commission approved an increase in the authorized capital stock of MTD Manila Expressway Inc., the principal shareholder of South Luzon Tollway Corp., from P1 billion to P3.4 billion.

Documents filed with the SEC showed that Malaysian-backed MTD Manila would use the increase in capital to pay for its subscription to P2.88 billion worth of shares in South Luzon.

South Luzon recently increased its authorized capital stock from P100 million to P4 billion. MTD Manila Expressway subscribed P2.88 billion worth of shares from the higher capital of South Luzon and committed to pay them through a combination of cash and advances.

MTD Manila Expressway said the higher capital was in line with its contractual obligations to joint venture partner Philippine National Construction Corp. for the increase in the authorized capital stock of South Luzon.

“Pursuant to its joint venture agreement with PNCC, 50 percent of the subscription of PNCC to the increase in the authorized capital stock of SLTC will be paid for by MTD Manila Expressway, for the benefit of PNCC,” the company told the SEC.

Subscribing to MTD Manila Expressway’s increase in capital were MTD Bahrain Holding Co. WLL, which paid P2.23 billion for its subscription, and Crown Equities Inc., which subscribed to P170 million worth of shares.

South Luzon, the joint venture company of PNCC and MTD Manila Expressway, has recently been given the go-signal to increase its authorized capital stock to P4 billion to partially fund the completion of phase 1 of the South Luzon Expressway project.

The increase will also allow South Luzon to comply with the prescribed debt-to-equity ratio under the company’s loan agreements with International Finance Corp. and a consortium of local banks led by Banco de Oro Universal Bank.