Aboitiz InfraCapital will take full control of Mactan Cebu International Airport (MCIA) in 2024 following the current operator’s decision to leave and explore other opportunities in the infrastructure space.
Megawide Construction Corp. and GMR Airports International BV inked a P25-billion share subscription and transfer agreement with the Aboitiz unit for the sale of MCIA developer and operator GMR-Megawide Cebu Airport Corp. (GMCAC).
The first tranche of the purchase involves about a third of GMCAC’s primary and secondary shares for P9.5 billion.
Megawide and GMR would also be issuing P15.5 billion worth of exchangeable notes, which would mature on Oct. 30, 2024. These would then be exchanged for the remaining shares in GMCAC.
The landmark deal was concluded after “several months” of discussions. It is still subject to requisite third-party and regulatory approvals.
BDO Capital and Investment Corp. president Eduardo Francisco said the equity infusion would bode well for GMCAC as this “provides it more financial muscle, with a higher capitalization, bigger balance sheet, and an improved gearing ratio.”
Open to partnerships
“It also paves the way for the entry of another experienced and strong industry player,” he added. Aboitiz’s portfolio includes the New Bohol-Panglao International Airport and Laguindingan International Airport.
Megawide chair, CEO, and president Edgar Saavedra said they “have always been open to partnerships that will enhance our capabilities and diversify our portfolio as an infrastructure innovator.” The consortium bagged the contract to modernize the Cebu airport in 2014.
Executives of Megawide faced a criminal case in 2020 for alleged foreign ownership violations in the gateway’s operations. They were cleared last June after a trial court took cognizance of a new law that expanded ownership in previously restricted sectors.
In choosing the Aboitiz group, GMCAC president and Megawide executive director for infrastructure development Louie Ferrer said they took note of the former’s “deep roots in Cebu and MCIA deserves another world-class, Cebuano company to sustain what GMCAC has built so far, and take it to the next level.” Aboitiz operates Mactan Economic Zone 2 Estate in Lapu-Lapu City and West Cebu Estate in Balamban, Cebu.
Tripling passenger traffic
“We at Aboitiz InfraCapital are happy to partner with GMR-Megawide for the continued growth and development of the Mactan-Cebu International Airport. The GMR-Megawide Consortium has done a tremendous job by significantly expanding the airport over the pre-pandemic years—almost tripling passenger traffic in five years,” Aboitiz InfraCapital president and CEO Cosette Canilao said.
In the first half, passenger volume at MCIA grew by 350 percent to over 2 million also as appetite for travel returned.
Megawide said it was now exploring other opportunities where it could use its expertise in engineering and construction.
“In the medium-term, we are seriously looking at diversifying into other exciting and high-growth infrastructure platforms, where we can leverage our engineering and construction expertise,” Saavedra said.
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The article was originally published in Inquirer.NET and written by Tyrone Jasper C. Piad.
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