Megawide completes divestment from Cebu airport

Tycoon Edgar Saavedra-led Megawide Construction Corp. has divested its remaining stake in the country’s second-busiest gateway for P7.76 billion to boost its liquidity as it gradually shifts to property development.

Megawide said on Wednesday that it had sold its remaining 33.33 percent plus one share in Aboitiz GMR Megawide Cebu Airport Corp., the operator of the Mactan Cebu International Airport, to Aboitiz InfraCapital Inc. two years after first announcing the sale.

In 2022, Megawide said Aboitiz Infra would take over the airport venture in a P25-billion deal.

Back then, Megawide also issued exchangeable notes to Aboitiz Infra worth P15.5 billion. These matured on Oct. 30 and were converted into the remaining shares of the airport venture.

Exchangeable notes are debt securities that can be swapped for shares in a company—in this case, the airport venture.

“As an infrastructure innovator, the completion of the airport transaction facilitates our natural progression into property development and allows us to focus on our precast and construction solutions unit, which serves as our unique competitive advantage against other industry players,” Saavedra, chair and CEO of Megawide, said in a statement, adding that they would likewise focus on developing the Parañaque Integrated Terminal Exchange (PITX).

After the deal, Megawide said its debt-to-equity ratio had improved to 1.9x from a high of 2.6x before the transaction. This means that the infrastructure firm has reduced its dependence on debt financing.

According to the company, proceeds from the deal were used to acquire real estate firm PH1 World Developers Inc. in July 2023.

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PH1 was previously owned by Megawide affiliate Citicore Holdings Investments Inc.

Megawide earlier said it had planned to spend up to P2 billion to beef up the portfolio of PH1. Another P1 billion would be spent for “transit-centric developments,” including PITX.

Apart from PITX, Megawide is also involved in the construction of the Malolos-Clark Railway Package 1 and Metro Manila Subway Project Contract Package 104.