By Ashley Erika O. Jose, Reporter
MEGAWIDE Construction Corp. raised P5 billion through its fixed-rate bond offering as part of its capital-raising activities, the engineering and infrastructure company announced on Thursday.
“The successful outcome of the bond offering is a vote of confidence in our ability to get back on our feet and sustain our growth momentum as we deliver on our existing and upcoming projects,” Megawide Group Chief Financial Officer Jez G. Dela Cruz told the stock exchange on Thursday.
It said the P5 billion raised consisted of P3.1 billion series C maturing in three years from the issued date; P1.1 billion series D maturing in five years; and P819.2 million maturing in seven years.
The company said it received interest from investors, leading to a total bid worth P6.4 billion, which was 1.6x oversubscribed from the base amount.
Mr. Dela Cruz said this is part of the company’s long-term liability management program, as it aims to strengthen its balance sheet in line with its sources and uses of funds.
“Our thrust to grow into more scalable platforms that offer synergies within our internal value chain paves the way for new opportunities,” said Megawide Chairman and Chief Executive Officer Edgar B. Saavedra.
RCBC Capital Corp., SB Capital Investment Corp., and PNB Capital and Investment Corp. were Megawide’s joint issue managers, joint lead underwriters, and bookrunners for the bond offering with RCBC Trust and Investments Group as trustee.
For Chinabank Capital Corp. Managing Director Juan Paolo E. Colet, the high interest rates of Megawide’s bonds attracted fixed-income investors trying to lock- in “generous yields” amid the expectations of rate cuts in the coming months.
“As interest rates decline, future bond issuances are likely to have lower coupons, so recent high yielding bonds have seen a lot of demand,” Mr. Colet said.
“Megawide’s successful P5-billion bond offering reflects strong investor confidence in the company’s robust business model and strategic vision. This capital will likely expand their infrastructure projects, aligning with the government’s push for development,” Seedbox Securities, Inc. equity trader Jayniel Carl S. Manuel said in an e-mail.
Proceeds from this bond offering will allow Megawide to optimize its capital structure by refinancing its existing debts and improving its overall financial stability.
“For investors, this offering signifies enhanced growth prospects and reflects positively on the company’s management, potentially leading to higher stock valuations, increased confidence, and reduced investment risks,” Mr. Manuel said.
For the first quarter, Megawide recorded P183.4 million in consolidated net income, a turnaround from the P7.4-million net loss last year. Consolidated revenue increased by 19% to P5.2 billion.
At the local bourse on Thursday, shares in the company went up by seven centavos or 2.43% higher to end at P2.95 apiece.
