Newly listed construction and engineering firm Megawide Construction is raising P3 billion through the sale of debt paper to selected institutional investors.
In a disclosure to the Philippine Stock Exchange on Tuesday, Megawide said its board had approved the issuance of fixed-rate corporate notes of up to P3 billion. The board also approved the first drawdown of as much as P1 billion to replace maturing obligations.
In an interview, Megawide vice president Louie Ferrer said the corporate notes would carry a tenor of five years. BDO Private Bank was mandated to arrange the issuance, Ferrer added.
“Proceeds will be used for our working capital. We have a lot of plans as we prepare to enter the infrastructure business,” Ferrer said.
For this year, Megawide has budgeted P1.8 billion for capital spending.
The issuance of corporate notes, as opposed to retail bonds that are offered to the public, is a faster way for corporations to raise funds as this involves no more than 19 institutional investors.
Megawide, whose current business is mostly on high-rise residential property construction such as for major client SM Development Corp., is keen on moving into infrastructure to heed the government’s call for public-private partnership.
Ferrer said Megawide deemed it a good time to lock up long-term funding costs instead of relying on short-term bilateral bank loans that require re-pricing every six months.
The company is keen on bidding for projects that cost P1 billion and over.