Megaworld’s international offering oversubscribed

Listed property developer Megaworld Corp. announced yesterday that its international offering of 3.727 billion common shares was more than one-and-a-half times oversubscribed. The office price has been set at P1.38 per share.

Proceeds of the international offering reached P5.14 billion. The domestic offer, which starts on April 10, is expected to raise an additional P271 million. The combined offering represents 35 percent of Megaworld’s existing share capital and 1.4 times the current free float. It is expected to improve liquidity of the stock.

Megaworld went on an international road show from March 27 to April 6 this year to expand its stockholders’ base among foreign institutional investors and raise fresh funds for its new and ongoing urban township projects.

"Megaworld’s global equity offering reached an important milestone as this was the first international primary share offering for a Philippine real estate company since 1996," said Megaworld senior vice president Kingson Sian. "With over 50 institutional investors covered in the global management road show, Megaworld was successful in attracting mostly high-quality long-term investors with particular strong interest from European investors. This issue is a strong vote of confidence not only in Megaworld but in the prospects of the Philippine economy as well."

"It was done at a very opportune time, with the Philippine stock market buoyed by positive investor sentiment and the Phisix at a seven-year high," Sian said.

Megaworld will use the proceeds of the international offer to leverage its position as leading player in BPO-related office development and in the residential condominium market.

Earlier, Megaworld chairman Andrew Tan said the developer will spend around 80 percent of the proceeds to build office space for business process outsourcing (BPO) firms. Over the next five years, it plans to build around 400,000 square meters of BPO-ready office space good for 176,000 call center employees. These offices will be located in its flagship project Eastwood City and also in McKinley Hill and Newport City, two major ongoing projects.

The company is allotting P47 billion in capital expenditure for various major projects over the next 10 years. It will spend P20 billion of this to build BPO-related offices and retail properties to expand its rental income.

Megaworld pioneered in urban township development in 1997 with Eastwood City, home to the country’s first-ever information technology park. It went on to develop Eastwood City into a model "live-work-play" community that integrates residential, office and retail components.

Megaworld has since focused on large-scale urban township developments such as the 50-hectare McKinley Hill in Fort Bonifacio Global City and the 25-hectare Newport City near the Villamor golf course in Pasay City.