Tycoon Edgar Saavedra’s Megawide Construction Corp. is raising P1.5 billion from a preferred shares 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 with 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.
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 were being 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 March 13-21.
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 were used to finance several of the company’s infrastructure investments, which include 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 in 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.
“The company is likewise looking forward to join in the development of the North-South Commuter Rail project,” Megawide said.
“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.
“The program includes foray into horizontal infrastructure by participating in government’s various road and rail infrastructure projects to complement its order book from the private sector, exploring various public sector- led infrastructure modernization and expansion program, and creating several transport-centric developments,” it added.