The offering, which ran from Jan. 2-9, involved 5.9 billion common shares sold to Megaworld shareholders for P1.83 each share or a 15.14 percent discount to the 10-day volume weighted average price of the stock from Nov. 23 to Dec. 7, 2006.
Megaworld said the rights offer, which raised P10.8 billion, was oversubscribed by about 566 million shares or 9.6 percent of the total rights shares. Out of this oversubscription amount, 64 percent came from foreign fund managers, reflecting strong investor confidence in both the company and the Philippine economy.
"This is the most widely participated stock rights offering in the recent history of the Philippine Stock Exchange," said Ed Francisco, president of BDO Capital & Investment Corp., which acted as the financial advisor for the rights issue.
Bulk of the sales proceeds or about P4 billion will go to the development of the hotel, retail and office components of Cityplace, Megaworld’s first project in Manila’s Chinatown district. About P3 billion has been earmarked for landbanking activities, P2 billion for working capital requirements and the remaining P1 billion for the continued expansion of its business process outsourcing office space in Eastwood City in Libis, Quezon City.
Megaworld shares jumped to as high as P2.60 before closing four centavos higher at P2.46 yesterday.
Megaworld chairman and president Andrew Tan said proceeds from the issue "will help Megaworld sustain its growth momentum as the property sector enters a hyper-growth stage."
Megaworld has projected a net income of P1.9 billion in 2006 or an increase of 66 percent from P1.17 billion the year before. It expects net income to grow further to P2.88 billion this year.
Megaworld is one of the leaders in the residential condominium and business process outsourcing (BPO) office segments of the real estate market. It has emerged as the biggest developer of townships in prime locations in Metro Manila. These are large-scale, mixed-use communities that integrate residential, commercial, educational/training, leisure and entertainment components.
Megaworld’s ongoing township projects include Eastwood City in Quezon City; Forbes Town Center and McKinley Hill in Fort Bonifacio, Taguig City; Newport City in Villamor, Pasay City; Manhattan Garden City in Araneta Center, Quezon City; and Cityplace in Manila.