Megaworld raises P10B for project financing

MANILA, Philippines - Property giant Megaworld Corp. is raising P10 billion in fresh funding for its projects through a board-approved plan to increase its authorized capital stock.

The additional capital will support the firm’s spending requirements this year, including the third residential condominium cluster in the 20-hectare Mactan Newtown project in Cebu.

In a disclosure, Megaworld said its board of directors allowed the company to hike its authorized capital stock by 10 billion shares with a par value of P1 each share.

“The company intends to use the subscription proceeds for project development, land acquisition, investments and general corporate purposes,” Megaworld said.

Of the 10 billion shares, 2.5 billion shares shall be subscribed by its parent, Alliance Global Group Inc. (AGI), at the price of P4.29 per share.

Hence, AGI will pour in P10.725 billion for the new Megaworld shares, which were sold at a five-percent premium over its 30-day volume weighted average price.

“AGI sees Megaworld’s stock as undervalued and remains confident that the real estate market will continue to expand due to strong demand fuelled by a robust Philippine economy,” AGI said in a separate disclosure.

The capital increase is still subject to shareholders’ approval during the company’s stockholders meeting in July.

Meanwhile, the real estate firm is launching its third residential condominium cluster in the Mactan Newtown development.

“The company has started pre-selling the 18-story first tower of One Manchester Place this month. This brings the total number of residential buildings in the township to eight,” Megaworld said.

Megaworld’s “live-work-play” township project has benefited from strong demand in Cebu.

For instance, the first residential cluster composed of four towers has been fully sold out mostly to Japanese retirees less than six months after it was launched last year.

“This prompted the company to launch its second residential cluster of three more towers, One Pacific Residence, in third quarter of 2012,” Megaworld said, adding that it was also sold out.

One Manchester Place is highlighted by the scenic views of the historic Mactan Shrine, Magellan Bay and the Hilutungan Channel.

In February, Megaworld announced a P20-billion investment for the Mactan Newtown township in the next five to seven years.

Mactan Newtown is Megaworld’s first masterplanned mixed-use development in Central Visayas. Aside from residential condominiums, the township will also include office towers, retail and commercial strips, malls, a hotel as well as leisure and entertainment amenities.

Early this year, AGI’s property arm committed to spend a record P35 billion for its property projects this year amid the property boom, up from P25 billion in 2012.

Megaworld, which recorded P63.5 billion in residential reservation sales last year, will launch at least 10 new projects in the first half given robust demand.

Like other real estate firms, the firm is benefiting from low interest rates that spur home loans, increasing income of the middle class, high demand amid a backlog and growth in the office segment driven by the outsourcing industry.

In more than 20 years of operations, the Megaworld group has completed more than 240 residential and office buildings with a total floor area of around six million square meters.