May 25, 2014

Razon open to joining SMC for airport project

The chairman of Bloomberry Resorts Corp (BLOOM) Enrique Razon said a new international airport will be synergistic with the operations of his company and thus he is open to consider a partnership with San Miguel Corp (SMC) if invited to join in the latter's proposal for a US$10b airport project. Mr. Razon statement follows earlier reports that JG Summit Holdings Inc was also interested to participate in the project.

Our take: Government has been considering the conversion of the former US naval base in Sangley Point, Cavite as an alternative site for a new airport. Unfortunately, there seems to be no definite plan at the moment.

Over the weekend, the deputy director of the Civil Aviation Authority of the Phils was reportedly lukewarm to SMC's proposal and preferred to build additional runways as these are cheaper and quicker to build and can double the capacity of the Ninoy Aquino International Airport.

While it remains to be seen if government will entertain and will seriously study SMC's proposal, recent expressions of interest by high-profile businessmen can help drum up support and highlight the urgency of having a bigger and more efficient international airport.

This should create trading opportunities on shares of companies engaged in tourism-related activities such asgaming companies and property firms with hotel and resorts operations. – WealthSec