Megawide prices IPO at P7.84

MANILA, Philippines –  Fast-growing contractor Megawide Corp. has priced its initial public offering (IPO) at P7.84 each share, the maximum offer price, to raise about P2.29 billion.

Ed Francisco, president of BDO Capital & Investments Corp., said the IPO was priced at high-end due to strong demand for Megawide shares. “Demand held in spite of weak global markets and of what’s happening in Egypt. We received additional institutional orders,” he said.

BDO is Megawide’s lead underwriter for the offering.

Megawide, the first company to list in the stock market this year, is offering up to 292 million common shares to the public, 64 percent of which would be issued to a privately-held company of the Sy family while the rest would be distributed to trading participants and local small investors.

The shares to be bought by the Sy family represent 20 percent of the construction and engineering firm.

Owned by civil engineers Michael Cosiquien and Edgar Saavedra, Megawide is an emerging leader in the local construction industry. From 2007 to September 2010, the company has entered into 26 construction contracts with a total value amounting to P22.9 billion. It has completed numerous low-rise to high-rise condominiums and industrial buildings, including the Antel Spa Residences, Citysquare Residences, Bellevue Hotel, Hotel Kimberly Tagaytay, Millenia Tower and Parcvue Hotel. 

Megawide intends to use proceeds from the offering to fund the construction of a P1-billion state-of-the art pre-cast concrete plant in Taytay, Rizal which will allow it to engage in mid-rise buildings and socialized housing, expand its coverage and services to road and mass transportation infrastructure.

Development of the plant is slated this year with the completion expected sometime in 2013.

 Other proceeds will be used to acquire new tower cranes and other earth moving equipment as well as for working capital requirements.

The offering will run from Feb. 7 to 11 while the listing of the shares has been scheduled on Feb. 18.

Among the company’s current projects include SM Development Corp.’s Grass Residences, Sea Residences, Berkeley Residences and Jazz Residences condominium projects, Belle Corp.’s Belle Hotel Casino, Ground 18 Realty Corp.’s Bench Corp. Office Building and Prince Jun Development Corp.’s University Tower Malate and University Tower II.

Megawide, the major contractor of taipan Henry Sy’s real estate development arm SM Development Corp., is expected 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 had a backlog of P15.4 billion worth of orders as of September 30 last year.