Metro Rail Transit Corporation

Metro Rail Transit Corporation ("MRTC") maintains and runs one of Manila's busiest rail lines, the MRT3. The MRTC was awarded a 25 year operations / maintenance and development contract with a total project cost of approximately US $700 million through a Build Lease Transfer Agreement with the Republic of Philippines. In addition, Equity Rental Payments (ERPs) at fixed rates guaranteed the equity investors a return for 25 years; however, these ERPs were later securitized by the original owners of MRTC and are freely traded in the secondary markets. Significant ERP arrears had built up during the life of the contract because of non / late payments by the Philippine government.

Alvarez & Marsal was engaged by the Board of Directors to assess the company's financial status, operations, controls and processes, as well as to evaluate options for refinancing the system. The A&M team reviewed the company's obligations and covenants, assessed compliance levels, analyzed cash flows, reviewed significant receipts and payments, analyzed management structure and management reporting procedures and prepared monthly management reports. In addition, A&M developed recommendations for improvement and immediate next steps. Acting on behalf of MRTC in negotiations with Philippine government and system maintenance providers, A&M was able to successfully resolve payment disputes.