Property developer Megaworld Corp. has obtained approval from the Securities and Exchange Commission to beef up its authorized capital by P10 billion, partly funded by an infusion from parent firm Alliance Global Group Inc. (AGI).
This recapitalization program—earlier approved by shareholders to finance project development, land acquisition and other corporate purposes—will bring Megaworld’s authorized capital to P40.2 billion divided into 40.14 billion common shares with a par value of P1 per share and six billion preferred shares with a par value of one centavo each.
Megaworld’s common stocks are currently valued by the market at P3.35 per share based on Monday’s closing price, giving the property firm a market capitalization of P99.2 billion.
The company has about 29.59 billion common shares currently issued and outstanding, equivalent to about 73.7 percent of its newly raised authorized capital stock.
AGI earlier announced its subscription of 25 percent of the P10-billion increase in Megaworld’s authorized capital, equivalent to 2.5 billion common shares at a subscription price of P4.29 per share for a total bloc of P10.725 billion. The subscription price marked a 5-percent premium over Megaworld’s 30-day volume-weighted average price when the infusion was committed in May this year.
AGI had said Megaworld stock was “undervalued” and that it remained “confident that the real estate market will continue to expand due to strong demand fueled by a robust Philippine economy.”
It was announced last June that key property-related businesses under the Andrew Tan group would be consolidated into flagship brand Megaworld. The three companies included in this group-wide restructuring are leisure estate unit Global-Estate Resorts Inc. (Geri), middle-income residential development unit Empire East Land Holdings Inc. (ELI) and Suntrust Properties Inc.
The consolidation process started with Megaworld itself purchasing additional shares in GERI and ELI. Megaworld bought P5.65 billion worth of shares in GERI and separately committed P1.26-billion in new equity for ELI.