Megawide IPO draws interest of Sy family, SMC, Phinma

MANILA, Philippines -  Several big corporations, including San Miguel Corp. and Phinma Properties, have reportedly expressed interest to invest in Megawide Corp., in addition to the Sy family, which has agreed to take a 20-percent stake in the fast-growing contractor, sources said yesterday.

Megawide officials said the Sy family, through an unlisted private company, is subscribing to 64 percent of Megawide’s total initial public offering (IPO) shares which will be priced at a maximum of P7.84 each share. The final offer price will be set today (Feb. 3).

Sources said San Miguel, which was invited to look into Megawide, is “evaluating” the company, which it found attractive since it would fit into its diversification into infrastructure.

Megawide is expanding its services from building construction to complete infrastructure which includes power plants, railroads and airports, among others.

The same source said Megawide also got Phinma Properties’ attention considering its good track record.

Ed Francisco, president of BDO Capital, said several large corporations have expressed interest to invest in Megawide but given the significant chunk of shares to be acquired by the Sy family, these firms might have to wait due to the limited number of shares left for the public. BDO is Megawide’s issue manager and lead underwriter.

“We approached the SM Group to invest. It is strategic for them because because it’s good to be affiliated with your supplier,” Francisco said.

Megawide chairman Michael Cosiquien said the company is looking to partner with other big firms to cut its dependence on the SM Group, which accounts for 70 percent of the contractor’s total projects.

Cosiquien said the firm is broadening its business to also include mass housing, with plans to build one million homes in 10 years or 100,000 units a year.

Megawide is forecast to post a net income of as much as P800 million this year, or more than double the P320 million reported in 2010.

The company, which had a backlog of P15.4 billion as of Sept. 30 last year, is looking at a cash dividend policy of 20 to 30 percent of unappropriated retained earnings.

The company is offering up to 292 million primary common shares targeted for listing on Feb. 18. It will be the first company to list on the local bourse this year.

Proceeds from the offering will be used to build a P1-billion world-class pre-cast concrete manufacturing plant in Taytay, Rizal as well as invest in new equipment such as the automatic climbing system, which can cut production time by 20 percent and boost capacity by 35 percent.

For this year, Megawide has programmed P2.02 billion in capital expenditures, more than double 2010’s budget of P800 million, as it hopes to capitalize on a resurgent property market.

Aside from the SM Group, Megawide is also the contractor of Belle Corp., Antel Group, Suyen Corp. (owner of Bench), Prince Jun Development Group, Bellevue Hotel Group, Keppelland Realty, Malate Bayview Development Group, Goldland Properties and Dynamic Realty.