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By: Marvin Germo | October 3, 2019

Avoiding The Repetition

We all have those moments where we think borrowing money is the solution to our business or investment problems. It happened to Mr. Manuel V. Pangilinan, who was caught up in trouble with borrowing binge decades back. Now, he is going after the biggest initial public offering (IPO) here in the Philippines so he can avoid the risk of repeating the same trouble. In fact, he is also trying to make a giant share sale for the hospital unit of Metro Pacific Investments Corporation in order to raise up to $1.6 billion. The IPO is still awaiting the approval of regulators.

Catch me in my live training events! (quick plug)

The heart of why I do these seminars is I want to build a generation of Filipinos with the right foundation in stock investing.  I want to bring smart investing to every Filipino around the world! If you would like to know more about how you could time the market check out the trainings below.

Stock Smarts Manila – September 14, 15, 21, 22,&28, 2019
Stock Smarts Qatar —  October 3 – 6, 2019
Stock Smarts Cebu – October 26-27,2019
Stock Smarts Taiwan – November 2, 2019
ICON Davao – November 30, 2019

Proceeds Will Go To Loans

The proceeds from the IPO will just go out as fast as it comes in since Metro Pacific has billions of dollars currently in borrowings and large outlays are needed for its projects for the next years including toll-road, light-rail projects, and power generation. The firm is confident that it has built a real tangible gain from investing in a hospital unit. This business unit was started in 2007 and Metro Pacific invested about $100 million in it. So, the proceeds from its IPO will mostly go to the reduction of the debt of the firm.

Preemptive Move

Now that Metro Pacific has found a way to pay its loans, this time, it is addressing its debt to prevent it from becoming an issue. The firm, together with its subsidiaries, has debts amounting to $4.73 billion for amassing power, toll road, water, and hospital assets. $1.3 billion of it will become due from this year through 2023. From the expected sale of $1.6 billion, Metro Pacific would be getting $970 million as it will sell down its 60% stake in Metro Pacific Hospital Holdings Inc. to 20%. $125 million will go to its expansion and the remaining from the sale of half of 40% stake will go to Singapore sovereign wealth fund GIC Pte.

Saving For Interest Cost

The firm will save P2 billion in annual interest costs from the payment of the debt so to provide a better foundation to finance its plan for a 3-year expansion that will include light railway, toll roads, and four waste-to-power projects. Although there is a big amount coming in, the money will go back quickly to the project of Metro Pacific. It expects that in the next few years, there will be a lot of capital to spend but it would take time for payback.

I’m excited to share my 5th book overall and the 4th book in the Stock Smarts series, Stock Smarts: Breaking the Resistance – How to time your traders perfectly. The heart of this book is to teach you strategic ways on how to come in and buy and sell stocks in a way where you come as the market is headed up and come out as the market is headed down. The book is now out and exclusive via Marvin Germo Book Orders.
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