Megawide to raise P4-B to pay for debt

Megawide Construction Corporation is planning to raise up to P4 billion through another issuance of preferred shares to pay for debt.

In a disclosure to the Philippine Stock Exchange, the firm said it will offer for sale of up to 40 million preferred shares, with a targeted price of P100 per share, by way of public offering or private placement transaction.

The P4 billion to be raised will primarily 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.

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For this, Megawide is seeking to increase its authorized capital stock (ACS) by 26 million preferred shares. This move brings the Company’s total to 150,000,000 cumulative, non-voting, non-participating, non-convertible, perpetual ACS for preferred shares.

The increase in ACS 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 an issuance of P4.4 billion Series 2 Preferred Shares last November to fund its long-term growth roadmap.   “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,” said Megawide Group Chief Financial Officer Ramon H. Diaz.

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Article and Photo originally posted by Manila Bulletin last March 5, 2021 5:30am and written by James A. Loyola.

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