The shares will be issued out of a proposed P1 billion increase in Fairmont’s authorized capital stock. Megaworld Corp. currently has a direct 11.75-percent stake in Fairmont.
Twenty-five percent of the subscription price in the amount of P62.5 million shall be payable upon signing of the subscription agreement with the balance payable upon call by Fairmont’s board of directors.
Megaworld’s infusion of fresh capital into Fairmont would enable the latter "to pursue the development of various socialized and mass housing projects."
Upon approval of the stockholders in next month’s meeting, Fairmont will increase its authorized capital stock to P3 billion from P2 billion.
With the rapidly changing global economy, Fairmont has directed its focus towards the information technology, real estate development and tourism related businesses.
Megaworld, on the other hand, focuses on the middle to high-end residential and office markets. It also has 43-percent owned subsidiary Empire East, catering to the lower to middle income market segment.
Apart from property development, Megaworld is also into hotel operations through Prestige Hotels & Resorts Inc., a subsidiary which operates the Richmonde Hotel in the Ortigas Center. Megaworld has a landbank of one million square meters, good for 7 to 10 years of development excluding potential joint ventures.