In a disclosure to the Philippine Stock Exchange, BDO Capital & Investment Corp., the lead underwriter for Megaworld’s domestic share offering, said the offer price "represents a discount of nine percent to the 10-day volume weighted average price of P1.52."
Trading in Megaworld shares was suspended yesterday and will last until April 21 in line with its stock offering. Megaworld closed at P1.56 last Thursday.
Megaworld expects to raise over $100 million from the offering, which will be used to fund capital expenditures until 2007.
The company is selling up to 4.51 billion primary and secondary shares, of which 588.5 million shares will be used to cover any over-allotments during the offer period. Megaworld said 95 percent of the shares to be offered will be sold to foreign investors and the remaining five percent will be sold within the Philippines.
UBS Investment Bank has been tapped as sole international underwriter and book runner.
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 proceeds will be used for the construction of Mckinley Hill Cyberpark and Mckinley Hill Town Center, and another P2 billion for 1800 and 1880 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 which will be 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 reported a 43 percent growth in net profit last year to P1.15 billion, driven by 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.