Megawide planning $120-M equity issue

Megawide Construction Corp., a listed contractor partly owned by billionaire Henry Sy, is mulling a $100-million to $120-million share offer late this year to finance new projects, a company executive said last week.

Oliver Tan, Megawide chief financial officer, told the Inquirer that the final timing and size of the equity offer would depend on market conditions. He added that they were looking at marketing the deal to investors abroad and were still in the process of evaluating underwriters.

“We are looking at an equity offer, we have a lot of projects in the pipeline,” Tan said in an interview.

Megawide, which made its name building residential condominium projects for the Sy family’s SM Development Corp., has since diversified its client base. Its revenue mix is also undergoing changes after bagging two public private partnership deals to build classrooms and the modernization of the Philippine Orthopedic Center in Quezon City.

Last December, it outbid six other groups with a P14.4-billion offer for the Mactan-Cebu International Airport PPP, but has yet to be awarded the project by the Transportation Department given issues raised by a rival bidder.

Tan noted that they were willing to wait until next year for the share offer should market conditions remain volatile in the second half of 2014.

Megawide’s management has yet to decide on the final  deal structure, he added, but the intention was to raise funds with as little ownership dilution as possible.  He said a rights offering was thus among the options being considered.

New infrastructure deals would come on top of the company’s current core business catering to property developers, Tan said.

Tan added that Megawide was projecting profit and sales to grow about 20 percent this year. He said 2013 figures have yet to be finalized but he estimated sales at close to P11 billion and profit at over P1 billion.

Megawide shares closed flat on Friday at P12.78 each, data from the Philippine Stock Exchange showed.

The company’s last equity offer was in May last year, when it raised P2.37 billion via a “top-up” offering, allowing the firm to take advantage of the Philippine stock market’s record gains in 2013.

The deal, arranged by CLSA Ltd. and First Metro Investment Corp., priced Megawide at P20 per share, then at a 10.7 percent discount.