THE Securities and Exchange Commission (SEC) has approved the P3-billion preferred shares offering of Megawide Construction Corp.
In its en banc meeting, the SEC approved the registration statement of Megawide covering up to 20 million preferred shares, with an oversubscription option of up to 10 million shares, subject to the company’s compliance with certain remaining requirements.
The preferred shares, which are cumulative, non-voting, non-participating, non-convertible, redeemable and perpetual, will be offered to the public at a price of up to P100 apiece.
The listed company is expected to net up to P2.97 billion from the offer, assuming the overallotment option is fully exercised. Proceeds will be used for debt refinancing, partial financing of projects in the pipeline and general corporate purposes.
The offer period will run from October 30 to November 10, in time for listing at the main board of the Philippine Stock Exchange on November 19, according to the latest timetable submitted to the SEC.
Megawide tapped PNB Capital and Investment Corp., RCBC Capital Corp. and Security Bank Capital Investment Corp. to serve as the joint issue managers, joint lead underwriters and joint bookrunners for the offer. Megawide said its income for the first half of the year fell to P436.41 million from the previous year’s P437.58 million on weaker second-quarter performance.
Consolidated revenues for the period fell 23 percent to P8.77 billion from the previous year’s P11.49 billion, as projects under construction enter the tail-end of the life cycle.
‘Based on our performance in the first six months of the year, we are on track to outpace our net income from the previous year. This is also partly driven by the increasing contribution from our real estate business, which is steadily emerging as a new growth driver. Other business segments are expected to complement our consolidated overall performance as we replenish our order book for EPC and precast and construction solutions from both external and internal clients,’ Megawide Chairman and CEO Edgar B. Saavedra said.
For the second quarter alone, its income fell much deeper to P227.19 million, down by 10 percent from the previous year’s P254.16 billion, while revenues fell 28 percent to P4.45 billion from the previous P6.21 billion.
In terms of segment, construction operations contributed P7.3 billion for the first half of the year and accounted for 85 percent of total consolidated revenues. The performance was traced to the winding down phase for a number of ongoing projects, which generally churn in lower revenues based on the S-Curve but deliver higher margins.
Revenue from real estate operations amounted to P1.1 billion, more than 3 times from last year, due to ongoing projects, such as ‘My Enso Lofts,’ ‘The Hive,’ ‘Northscapes,’ ‘Modan Lofts,’ ‘One Lancaster Park’ and ‘Lykke Condo’ with healthy sales for the first half at P1.7 billion, which is 64-percent higher year on year. This brought unbooked revenues to a healthy level of P8.8 billion.