Megawide Construction eyes up to P3 billion from IPO

MANILA, Philippines - Megawide Construction Corp., one of the fastest growing private construction companies in the country, is aiming to raise P2 billion to P3 billion in an initial public offering of shares to bankroll its massive expansion program.

In a chance interview, Megawide chief financial officer Oliver Y. Tan said the company is hoping to go public in October or November this year to take advantage of the improving market sentiment and activity.

Tan said the company has tapped ATR Kim-Eng Capital as lead underwriter for the sale of around 26 percent of Mega-wide’s capital. Absolute Traders Inc., on the other hand, will serve as Megawide’s financial advisor.

The shares may be sold at between P6 and P12 each share, Tan said.

Megawide, which boasts of using the most advanced, state-of-the-art facility from Europe, is the developer of around 70 percent of the residential condominium projects of SM Development Corp. which include the 42-story Grass Residences in North Edsa, the 25-story Berkley Residences on Katipunan Ave. fronting Ateneo, and Sea Residences in Mall of Asia along Roxas Boulevard, Jazz Residences in Reposo St. in Makati.

Other ongoing projects include Antel Spa Residences in Makati, City Square Residences near Abad Santos, the 45-story Malate Bayview Mansion, the Bench corporate tower in Bonifacio Global City, and the Bellevue Hotel.

Owned by civil engineers Edgar Saavedra and Michael Cosiquien, Megawide needs up to P3 billion to partly fund the construction of a pre-cast plant in Taytay, Rizal, amounting to around P2 billion.

Megawide reported a six-fold jump in its net income last year to P181 million. For this year, the company is eyeing net earnings of around P500 million or more than three times a year earlier on projected revenues of P5 billion toP7 billion.

Tan said the company is expected to book P12.2 billion in revenues within the next two years upon completion of some projects.

According to Tan, Megawide is aiming to build 17,000 condominium units this year and expects this figure to double by 2011.

To further boost its cashflow, the company is looking at Vietnam and India as potential sites for expansion, noting that Vietnam has a huge housing backlog of six million units compared with only four million units in the Philippines.

Tan said Megawide is also studying the possibility of listing overseas, probably in India.