Aboitiz Group acquires 33% stake in Cebu airport operator

MANILA, Philippines — The Aboitiz Group is shelling out P25 billion to acquire full ownership of the developer and operator of the Mactan Cebu International Airport (MCIA) by the end of 2024.

Megawide Construction Corp. informed the Philippine Stock Exchange that it signed a share subscription and transfer agreement with Aboitiz InfraCapital Inc. (AIC).

Under the transaction, the infrastructure unit of the Aboitiz Group. Is set to acquire shares in GMR-Megawide Cebu Airport Corp. (GMCAC), a joint venture between Megawide and GMR Airports International BV (GAIBV).

The joint venture maintains the 25-year concession to develop, operate and maintain the MCIA.

Initially, AIC is spending P9.5 billion to purchase primary and secondary shares from Megawide and GAIBV to own 33.3 percent minus one share in GMCAC.

Megawide and GAIBV would then issue P15.5 billion worth of exchangeable notes to AIC.

When the notes mature on Oct. 30, 2024, AIC would trade them for the remaining 66.6 percent plus one stake in GMCAC.

GAIBV’s parent GMR Infrastructure Ltd. would remain in the picture, serving as technical services provider to the airport.

Eduardo Francisco, president of BDO Capital and Investment Corp., said the deal not only bolsters the financial stability of GMCAC, but also paves the way for the entry of an infrastructure firm with interests in Cebu.

BDO Capital advised Megawide and GAIBV in the agreement.

AIC operates the 63-hectare Mactan Economic Zone 2 Estate in Lapu-Lapu City as well as the 540-hectare West Cebu Estate in Balamban.

“For GMCAC, the infusion provides it more financial muscle, with a higher capitalization, bigger balance sheet and an improved gearing ratio [and] it also paves the way for the entry of another experienced and strong industry player,” Francisco said.

GMCAC president and Megawide executive director for infrastructure development Louie Ferrer said the agreement raises the fair market value of the MCIA.

Likewise, the capital to be infused by AIC prepares Megawide’s pockets for future projects.

In 2020 Megawide, along with two South Korean firms, won the contract to build the first phase of the Malolos-Clark Railway Project.

Last May. Megawide also received the go signal to construct two stations, namely, Ortigas North and Ortigas South, for the Metro Manila Subway.

On the other hand, AIC president and CEO Cosette Canilao expressed her confidence that the travel sector will recover soon given the improving passenger numbers, including MCIA traffic.

Based on records, MCIA traffic more than quadrupled to at least two million in the first semester, from around 470,000 during the same period last year.