Construction and engineering firm Megawide Construction Corp. has signed a deal to issue 13.5 million preferred shares to Citicore Holdings Investment Inc., one of its key shareholders, in line with its capital build-up program.
Citicore formally subscribed to the new preferred shares at P1 each and paid 25 percent of the the subscription in cash, amounting to P3.375 million, Megawide disclosed to the Philippine Stock Exchange on Tuesday.
Citicore owns 29.71 percent of Megawide, based on the company’s latest ownership report.
Megawide has likewise been planning to issue preferred shares to the public, aiming to raise as much as P5 billion. This is to fund its growth initiatives, particularly the rollout of Megawide’s infrastructure programs and the long-term expansion program for precast construction, as well as for general corporate requirements.
The preferred shares issued to Citicore consisted of series 3 shares which were approved for issuance by its board earlier.
Megawide’s board also approved the issuance of 40 million series 1 preferred shares and not more than 50 million series 2 preferred shares.
The issuance of these preferred shares will also allow Megawide to refinance an earlier issuance of P4 billion worth of preferred shares maturing next year.
In 2014, Megawide issued 40 million preferred shares at an offer price of P100 per share. These shares are also listed on the Philippine Stock Exchange.
The company plans to invest as much as P3 billion in building a new precast concrete manufacturing facility in Bulacan to serve high-rise building and infrastructure construction requirements over the long haul. This will be its second precast construction facility after the first hub that was built in Taytay, Rizal.
The first precast hub was opened in 2012 using part of the proceeds from Megawide’s initial public offering in 2011.
Megawide is keen on building the new facility in Bulacan due to its proximity to upcoming big-ticket infrastructure requirements —Doris Dumlao-Abadilla INQ