Megaworld to raise $100M for projects

Upscale property developer Megaworld Corp. is raising over $100 million from the offering of 3.92 billion shares in the international and local markets next month to partly finance its capital and project expenditures up to 2007.

UBS Investment Bank has been tapped as sole international underwriter and book runner while BDO Capital & Investment Corp. is the lead domestic underwriter.

Megaworld approved the issuance of an additional 633,474,968 new common shares to cover any over-allotments of shares for its international offering.

The offering is aimed at expanding Megaworld’s shareholder base and free float and raising funds for its ongoing residential and office development projects.

Around P2.5 billion of the expected proceeds will be used for the construction of Mckinley Hill Cyberpark and Mckinley Hill Town Center and the 1800 Eastwood offices and Eastwood Mall.

Mckinley Hill is a township located on 50 hectares of land in Fort Bonifacio in Taguig. It is being designed to include the Mckinley Cyberpark, an information technology special economic zone, a low density residential subdivision for single-detached homes, low-rise residential garden villas, a leisure and entertainment area and an institutional area which is expected to include an embassy and educational institutions, including two international schools.

Megaworld posted a net profit of P1.15 billion last year, up 43 percent from the previous year, mainly due to higher sales from its residential projects and rental revenues. Revenues grew 19.3 percent to P5.32 billion.

Rental income likewise increased by 20.5 percent to P547.82 million from P454.65 million in 2004.

Eastwood City, Megaworld’s flagship project, accounted for bulk of the rental earnings, with its Cyber One office building and City Walk 2 leisure strip posting strong occupancy levels last year.

Eastwood City is a 16-hectare cyberpark. It is host to nearly one in every four business process outsourcing firms in the country like the call center operations of IBM and Citibank N.A.

Megaworld is expected to sustain its gains this year, mainly coming from residential projects – Fort Bonifacio-Bellagio, Forbeswood Parklane and McKinley Hill Village, and The Residential Resort at Villamor Air Base in Pasay City.

Bellagio and Forbeswood Parklane are part of the P15-billion Forbes Town Center at the Global City. The Residential Resort, meanwhile, is a low-density, 1.7-hectare community close to the Villamor golf course.

Megaworld focuses on the middle to high-end residential and office markets. It also has 43 percent owned subsidiary Empire East that caters to the lower to middle income market segment.