MEGAWIDE SETS P 1.5-B PREFERRED SHARES OFFER IN MARCH

Tycoon Edgar Saavedra-led Megawide Construction Corp. is raising P1.5 billion from a preferred share sale in March to redeem older obligations as it readies its balance sheet for future expansion.

The company, among the country’s biggest construction and engineering firms, filed an application at the Securities and Exchange Commission to sell 15 million non-voting perpetual series 5 preferred shares.

The shares will be offered at P100 each and will be listed on the main board of the Philippine Stock Exchange (PSE).

Megawide will use proceeds from the sale to fully redeem its series 2A preferred shares that were issued in 2020, according to the deal prospectus dated Jan. 5, 2023.

These will be redeemed before the divided rate increases due to a step-up feature that kicks in on May 27 this year.

The company retains the option to redeem the series 5 shares in 2026 or three years from the listing date, the prospectus showed.

Meanwhile, the dividend rate on the series 5 preferred shares will be set on March 8 this year while the offer period will run from Mar. 13 to Mar. 21.

Megawide plans to list the shares on the PSE on March 31, 2023.

“In case the offer does not materialize or the funds raised from the offer are insufficient to redeem the series 2A preferred shares, the company will use internally generated cash and other programmed funding to finance the redemption of the series 2A preferred shares,” Megawide said in the prospectus.

The company said proceeds from the series 2A shares had been used to finance several infrastructure investments, including the construction of Clark International Airport’s new terminal and the Mactan Cebu International Airport public private partnership contract.

Last month, Megawide and partner GMR Infrastructure of India completed the P25 billion sale of their Cebu Airport venture to the Aboitiz family’s Aboitiz Equity Ventures Inc., which will gain full ownership of the project on Oct. 30, 2024.

In its latest prospectus, Megawide said it was keen on investing in infrastructure after being awarded the contact to build a portion of the Metro Manila Subway, the country’s first underground train.

It is likewise looks forward to join the development of the North-South Commuter Rail project. “The company plans to further expand its portfolio by entering new segments to provide a strong, stable, and growing revenue stream in the long-run,” it said.

This includes foray into horizontal infrastructure by participating in government’s various road and rail projects.