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Much-publicized Piatco stake sale fails to materialize
(Business World (Philippines) Via Thomson Dialog NewsEdge)Principal players in a much-publicized sale of a stake in the Ninoy Aquino International Airport-Terminal 3 (NAIA-3) kept mum yesterday following a Wednesday announcement that the deal had collapsed.
Fraport AG of Germany on Wednesday said it had terminated talks with Manila Hotel Corp. for the sale of its stake in the Philippine International Air Terminals Co. (Piatco), the company that had the contract to build and operate NAIA-3.
In a statement, Fraport said talks with Manila were stopped because "substantial roadblocks" in the negotiations could not be removed. Among others, the company said, a waiver of the right of first refusal by co- shareholders, which was required for the sale of the shares, could not be secured.
Fraport spokesman Robert Payne declined to elaborate on the statement the company issued, saying that "its all we want to say."
He would not identify which shareholders refused to give their waiver of the right of first refusal for Fraport's shares in Piatco.
Manila Hotel President Jose Lina, who last week said his firm was still studying a legal comment filed by Fraport, could not be reached yesterday.
Negotiations for the share of the Fraport stake in Piatco ran for five months. In August 2005, Fraport announced that it accepted Manila Hotel's offer to purchase the German company's stake for $200 million.
Manila Hotel was to pay Fraport for the stake in two tranches. The first tranche was for $50 million to be released shortly after a purchase contract was signed, while the second tranche, amounting to $150 million, would be released six months after the contract signing.
The transfer of Fraport's shares and various rights and claims would have taken place once the second tranche has been received.
Fraport's co-shareholders include SB Airport Investments Inc. and Japan's Sojitz Corp., whose stakes in Piatco Manila Hotel said it was also buying. Also part of the consortium is the Cheng group, which is the local stakeholder in Piatco.
Mr. Payne also declined to say if Manila Hotel gave any downpayment for the stake, or if the German firm was open to selling its stake to other buyers.
"That was a confidential agreement, I can't comment on the specifics," he said.
Asked if Fraport was open to possible settlement with the government, Mr. Payne said "Fraport has always been open to several options over the years."
He added, however, that he could not comment on the proposal, since there was "nothing specific."
In the statement, Fraport said it will continue to pursue its claims at the World Bank's International Centre for Settlement of Investment Disputes.
Solicitor General Alfredo Benipayo, meanwhile, yesterday said an out- of-court settlement with the builders of NAIA-3 would be beneficial to the government only if it gets the nod of every single member of the consortium.
Last Wednesday, Malacanang said it is open to negotiations with the builders of NAIA-3 following a Supreme Court ruling that upheld a decision ordering that Piatco be compensated.
Mr. Benipayo noted that a settlement would be successful only if all the parties, which have filed separate suits before local and international courts, accede.
He emphasized that the government remains resolute in contesting the cases pending at local and international courts.
"We are not adverse to any amicable settlement. If any overtures for a settlement of the case will be made, that settlement must be global. If you settle with one, you have to settle with the rest. An ideal settlement must finish off the whole controversy," he told BusinessWorld.
He noted that the Supreme Court has yet to resolve the question on who actually built the terminal, so the government would not end up paying Piatco while the other builders' claims remain unextinguished.
Piatco has yet to settle its obligations to Japanese firms Takenaka Corp. and Asahikosan Corp. as ordered by a London court.
Fraport has a separate claim of $425 million against the government pending at the World Bank's dispute center in Washington.
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