CONGLOMERATE Metro Pacific Investments Corp. (MPIC) approved on Thursday a plan to issue 5 billion Class A preferred shares, which analysts say is aimed at investors wanting to benefit from the company’s growth potential without the risk inherent to common shares.

In a filing with the local stock exchange, the listed firm said the preferred shares, issued in favor of Metro Pacific Holdings Inc. which owns MPIC, will carry a par value of P0.01 for a total issue price of P50 million. The dividend rate for the shares is set at 10 percent per annum.

Preferred stocks are favored by some investors since these typically pay higher dividends than common shares; the tradeoff, however, is that these shares have no voting rights. Preferred-share owners also receive dividends before common shareholders and also have certain advantages in the event the company decides to liquidate assets. 

Maria Arlysa Narciso, an analyst at AB Capital who monitors listed holding companies, said the offering’s 10-percent dividend rate is quite “high,” making the shares attractive to investors looking for a stable recurring income.

Of late, MPIC has been taking steps to further grow its holdings in what is seen by some as a bid to become one of the country’s top infrastructure firms.

On Tuesday MPIC, the local holding firm of Hong Kong-based conglomerate First Pacific Co. Ltd., announced a fundraising initiative to raise between $200 million and $300 million either through a public offering or private placement. The firm said the funds will be used to increase its public float and also to fund future investments.

MPIC has been expanding aggressively in the past year and has expressed plans to increase its holdings in its interests in water, toll roads and hospitals through the North Luzon Expressway, water concessionaire Maynilad Water Services and hospitals Makati Medical Center and Davao Doctors Hospital. 

It is also preparing to purchase the 10.7-percent stake in Manila Electric Co. (Meralco)  from the trust fund of Philippine Long Distance Telephone Co., which Pangilinan chairs.

Through its subsidiary Metro Pacific Tollways Corp. (MPTC), the company recently announced its interest in acquiring the government’s stake in the Subic- Clark-Tarlac Expressway (SCTEx), which is funded by a loan from the Japan Bank for International Cooperation, for a total project cost of P27.12 billion.

“MPIC is basically making an infrastructure investment play,” said Jonathan Ravelas, Banco De Oro Unibank chief strategist, who added that buying into SCTEx is a natural move for MPIC, since it will complement its other investments. 

“If they add more roads, then [developers] will put more buildings, more water and power lines. It follows. The energy and infrastructure industries will become most preferred particularly in an economic recovery phase,” added Ravelas.

MPTC owns a significant stake in Tollways Management Corp., which operates SCTEx and the North Luzon Expressway.

MPIC has also expressed interest in increasing its stake in the Metro Manila Skyway, which operates a portion of the South Luzon Expressway from Makati to Parañaque. The skyway is currently being extended to Alabang.