Megawide returns to market with P6-B preferred shares offer
Megawide Construction Corp. is all set to return to the local capital market after moving past the final regulatory hurdle needed to raise up to P6 billion from its preferred shares offer.
The Edgar Saavedra-led company on Tuesday said the Securities and Exchange Commission had issued it a permit to sell 60 million perpetual series 6 preferred shares at P100 each. These will be offered from March 26 to April 4, with listing scheduled on April 14.
“The initial results of the book building were very encouraging and indicate a strong vote of confidence in Megawide’s long-term prospects,” said Jez Dela Cruz, the group’s chief financial officer.
The offer consists of: series 6A shares with a dividend rate of 7.6283 percent, series 6B at 7.9606 percent and series 6C at 8.2993 percent.
It has a base offer of P3 billion and an oversubscription option of up to P3 billion in case of high demand.
Holders of preferred shares are not given voting rights, although they are prioritized during dividend payouts. While the shares are perpetual, Megawide has the option to redeem during the fifth, seventh or 10th year, depending on the batch.
According to Dela Cruz, proceeds raised from the offer will be used to refinance Megawide’s series 4 preferred shares, bankroll the pipeline projects of its real estate arm and fund general corporate purposes.
PNB Capital and Investment Corp., RCBC Capital Corp. and Security Bank Capital Investment Corp. were tapped as joint issue managers, joint lead underwriters and joint bookrunners.
P1.8-B capital spending
Saavedra, president and CEO of Megawide, earlier said they would earmark P1.8 billion in capital outlays this year, half of which would go to PH1 World Developers Inc., the group’s property venture.
PH1 recently rolled out P14 billion worth of projects, including Lykke Kondo in Pasig City, and the third tower of One Lancaster Park and its Southscapes horizontal development in Cavite province.
The first two towers of One Lancaster Park have so far posted a 96-percent and 60-percent takeup, respectively. The newly-launched third tower is 30-percent sold, PH1 said.
Meanwhile, the other half of Megawide’s planned capital expenditure will go to its construction business, its main revenue driver.
In the first nine months of 2024, Megawide’s net profit surged by 69 percent to P562 million due to gains from government-led infrastructure projects and renewable energy capacity expansion.
Its top line likewise rose by 7.2 percent to P16.3 billion. The construction segment did the heavy lifting for Megawide and contributed 96 percent to overall revenues at P15.5 billion.
