Megacore buys 14.67% stake in Megawide for P5.68B
MANILA, Philippines – Megawide Construction Corporation's parent company Citicore Holdings Investment Incorporated sold its P14.67% stake in the listed construction firm to newly-formed Megacore Holdings Incorporated for P5.68 billion. This move was made to consolidate the economic stake of Megawide co-founder and president Edgar Saavedra.
Megacore is a newly-incorporated holding company formed to consolidate Saavedra's economic stake. Post-transaction, Saavedra, through Megacore and Citicore Holdings combined, will effectively own 40.17% of Megawide.
In turn, Citicore will reduce its stake in Megawide to 51% from 66.67%. Megawide chairman Michael Cosiquien's interest in the engineering and construction company remains consolidated through Citicore.
"This restructuring enables us to maximize our resources and skillsets, enabling us to focus on areas where they are best utilized. There is much that Edgar and I have yet to explore and accomplish. This transaction is part of our innovation towards bigger and better things," Cosiquien said in a statement.
Co-founded in 1997 by engineers Saavedra and Cosiquien, Megawide is one of the leading contractors and infrastructure developers in the Philippines.
From its roots in the construction of residential and commercial structures, Megawide has transitioned towards the development and management of large-scale infrastructure projects, such as airport development and integrated transport terminals.
"The transaction is strong proof of my confidence in Megawide. Twenty years ago, my former classmate, Michael Cosiquien, and I crafted the vision for Megawide to become one of the leading construction companies in the Philippines," Saavedra said.
Megawide had bagged 4 public-private partnership projects so far: the P2.5-billion Integrated Transport System-Southwest Terminal project; P17.52-billion Mactan-Cebu International Airport Project; P16.28-billion first phase of the PPP for School Infrastructure Project (PSIP); as well as PSIP's P3.86-billion second phase.
Cosiquien and Saavedra said they aim to use Megawide's core expertise in engineering procurement construction (EPC) to leverage its continuing diversification.
"In 20 years, we have managed to diversify our project portfolio to include not just private sector EPC projects but also public infrastructure. We're even looking into projects abroad. There are numerous opportunities for synergy with other sectors and we want to maximize that," said Saavedra.
On Tuesday, August 15, Megawide announced that it bagged a P14-billion construction contract from mass housing developer 8990 Holdings Incorporated.
Called Urban Deca Homes Ortigas, the project is Megawide's largest contract for a single private sector EPC project to date.
As of end-June 2017, Megawide's order book backlog stands at P33.7 billion, providing earnings visibility for the next two years.
Its new contracts include the Edades Suites of Rockwell Land Corporation, BGC 5th Avenue Apartments of Fort Bonifacio Development Corporation, and the Delta Project and Next Gen Zen 3 Zenith Foods Corporation plant expansion.
Megawide's net income for the 1st half of the year slowed down to P927 million, from P985.36 million registered in the same period a year ago. – Rappler.com