Megawide to raise P2.2 B from sale of treasury shares

MANILA, Philippines - Megawide Construction Corp. sold P2.23 billion worth of treasury shares to new investors in an accelerated private placement deal, raising fresh funds for settlement of loans.

In a disclosure to the Philippine Stock Exchange, Megawide said its board approved the sale of 150 million treasury shares at P14.90 apiece or at a 4.7 percent discount from yesterday’s closing price of P15.64.

CLSA acted as sole global coordinator and sole bookrunner for the transaction while First Metro Investment Corp. was the domestic manager for the offering.

Megawide said proceeds of the placement would be be used for partial repayment of the bridge loan availed for the purchase of Megawide shares from the Sy family’s Sybase Equity Investments.
The fast-growing construction and engineering firm bought back from the Sy family a total of 410.84 million shares at P10.0379 each for a total of P6.12 billion as part of its five-year diversification plan.

Megawide seeks to transform itself from pure construction to a well diversified infrastructure and engineering conglomerate in order to further boost revenues.

Under the plan, Megawide’s core businesses will be in construction, airport operation, transport and power generation with a focus on renewable energy.

Last year, the construction segment accounted for 66 percent Megawide’s total income while the airport business chipped in 34 percent.

Megawide acquired the 25-year concession to operate Mactan Cebu International Airport in 2014.  The contract includes the construction of a second passenger terminal.

The company logged a 49-percent jump in its first semester income to P1.2 billion on record revenues that jumped 77 percent to P10.07 billion. Revenues from construction contributed P9.17 billion or 91 percent of total revenues.

It expects to sustain this upward trajection given the Duterte administration’s thrust to boost infrastructure spending. - Zinnia Dela Peña