Megawide buys back shares, unveils diversification plan

Megawide Construction Corp., one of the country’s biggest construction and infrastructure firms, has announced acquisitions worth about R18 billion as it unveils a five-year diversification plan.

In a statement, Megawide said the plan will transform the company from a construction and engineering firm into a fully diversified infrastructure conglomerate with a stronger recurring income.

Megawide bought back 410.84 million of its shares from the SM Group’s Sybase Equity Investment Corp. with an equivalent of 17 percent total issued and outstanding shares as of June this year.

The shares were acquired at R10.0379 per share, for a total of R4.12 billion, and were traded at the Philippine Stock Exchange.

The shares were acquired at R7.84 per share during Megawide’s Initial Public Offering in 2011.

Megawide Chief Executive Officer Michael Cosiquien said that the share buyback will be funded by internally generated funds.

The firm also announced the 100 percent acquisition of Citicore Power, a renewable energy (RE) company owned by its parent company Citicore Investment Holdings, for an undisclosed amount.

Citicore Power currently operates three solar power projects in the provinces of Bataan, Negros Occidental and Cebu with a total capacity of 103 megawatts. At about $2 million to $3 million per megawatt, these assets are worth up to R14 billion.

Cosiquien said the Citicore Power acquisition will be through a share swap via third party independent valuation.

With a commitment to produce 1000 Megawatts (MW) of clean energy, Megawide said Citicore Power will tap the widest range of renewable energy sources such as solar, biomass, wind, and hydropower.

“We set out with our five-year plan in 2011. The IPO was set up with the vision to transition from pure construction to a well diversified infrastructure and engineering conglomerate,” revealed Megawide Chief Financial Officer Oliver Tan.

“Now we have achieved that, we want to pursue stronger, wider-ranging recurring sources of revenue,” he added.

Megawide has revealed its four core businesses under the new structure: construction, airport operation, transport, and power generation with a focus on renewable energy.

In 2015, construction contributed 66 percent of total income, with the airport business bringing in 34 percent.

“Megawide is already at its prime as a construction company. More than ever, it is capable of providing the most basic and one of the important components of these businesses, and that is EPC. This is a natural progression. We are taking the company further,” said Cosiquien.

He added that “we remain bullish and hopeful in this current track and look forward to contributing to a stronger economy for the country.”