MEGAWIDE Construction Corp. on Thursday said it plans to raise as much as P4 billion from the sale of preferred shares.
The company said it will sell some 40 million preferred shares with a targetted price of P100 apiece through either public offering or private transaction.
Proceeds of the share sale will be used to refinance outstanding obligations and for general corporate purposes. The issuance is expected to be completed by the third quarter of this year, the company said.
The said shares will come from the increase of the company’s authorized capital stock of its preferred shares by an additional 26 million. Megawide said it submitted to regulators its application for the increase, which will bring the company’s total to 150 million in cumulative, non-voting, non-participating, non-convertible, perpetual preferred shares.
“The success of these initiatives reflects the strong support and confidence of our financial partners in Megawide’s prospects and shareholder value-creation. We look forward to a more fruitful cooperation between sources and users of fund as we slowly build our country back towards a First-World Philippines,” Edgar Saavedra, chairman and CEO of Megawide, said.
“Aside from resulting in a more manageable debt maturity tower, these exercises are very timely as we are able to take advantage of a low interest rate regime and generate savings from interest costs. Over the long run, this will enable us to manage our liabilities more efficiently and strengthen our balance sheet altogether,” Ramon H. Diaz, Megawide’s CFO, said.
The increase in authorized capital stock is part of the company’s long-term financial management program which began February last year, when it raised P3.6 billion from the issuance of corporate notes to retire maturing obligations. This was followed on by the issuance of P4.36-billion series 2 preferred shares offering last November to fund its long-term growth roadmap.
Megawide’s previous projects include the 10,000 classrooms program, the transformation of the Mactan-Cebu International Airport and the Parañaque Integrated Terminal Exchange.
“As much as these infrastructure projects provide a stable, recurring revenue base for the company, they also uplift the quality of infrastructure services and facilities in the country. The continuing support of our investors enables us to make great strides in helping our country restart after this crisis. From investors to partner communities, together we will reach a First-World Philippines,” Saavedra said.
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