Megawide sells Cebu airport stake for P7.76 billion

MANILA, Philippines — Megawide Construction Corp., the listed infrastructure and engineering company of tycoon Edgar Saavedra, has beefed up its balance sheet with the completion of the exchange of its remaining stake in Mactan Cebu International Airport (MCIA).

Megawide exchanged its remaining 33.3 percent plus one share of outstanding capital stock in MCIA operator Aboitiz GMR Megawide Cebu Airport Corp. in favor of Aboitiz InfraCapital Inc. (AIC) for P7.76 billion.

According to the company, the final closing boosts its liquidity position and reduces outstanding current liabilities after extinguishing the exchangeable notes from its books.

“As an infrastructure innovator, the completion of the airport transaction facilitates our natural progression into property development and allows us to focus on our precast and construction solutions unit – which serves as our unique competitive advantage against other industry players – and our other infrastructure projects, including the Paranaque Integrated Terminal Exchange,” Saavedra said.

“At the same time, this strengthens our balance sheet and forms part of our medium-term financial management program,” he said.

Megawide expects its current ratio to improve further to 1.54 times post-transaction, for recording at the end of Dec 31, 2024, from a current ratio of 1.29 times at the end of 2023.

In September 2022, Megawide, GMR Airports International BV (GAIBV) and AIC executed a share subscription and transfer agreement for AIC to acquire shares in GMR-Megawide Cebu Airport Corp. (GMCAC).

Under the agreement, Megawide and GAIBV will issue exchangeable notes in favor of AIC in the total amount of P15.53 billion.

The exchangeable notes will mature on Oct. 30, 2024 and will be exchanged by AIC for the rest of the 66.6 percent plus one share of GMCAC’s outstanding capital stock.

AIC completed the acquisition of the 33.3 percent minus one share stake in GMCAC in December 2022, with Megawide and GAIBV issuing the exchangeable notes.

Megawide said that after the airport deal, the company’s consolidated debt-to-equity significantly improved to 1.9 times from a high of 2.6 times prior to the transaction.

Aside from being an active infrastructure partner of the government, the company also forayed into the real estate development scene with the P5.2 billion acquisition of PH1 World Developers Inc., a developer focused on the affordable housing segment.

Megawide has also expressed interest in submitting bids for more infrastructure projects to be offered by the government.

It is currently constructing Malolos-Clark Railway Package 1 and Metro Manila Subway Project Contract Package 104.