Megawide Construction Corporation has opted to completely divest its remaining minority stake in Aboitiz GMR Megawide Cebu Airport Corporation’s (AGMCAC) operator of the award-winning Mactan Cebu International Airport (MCIA) for P7.76 billion.
In a disclosure to the Philippine Stock Exchange, Megawide said it exchanged its remaining 33.33 percent plus one share of outstanding capital stock in AGMCAC in favor of Aboitiz InfraCapital Inc. (AIC).
“For Megawide, the final closing will reduce the Company’s outstanding current liabilities – after extinguishing the Exchangeable Notes from its books – and boost its liquidity position,” the firm said.
From a current ratio of 1.29 times at the end of December 31, 2023, Megawide expects its current ratio to improve further to 1.54x post-transaction for recording at the end of December 31, 2024.
“As an infrastructure innovator, the completion of the airport transaction facilitates our natural progression into property development,” said Megawide Chairman and CEO Edgar Saavedra.
He added that the sale also “allows us to focus on our Precast and Construction Solutions (PCS) unit – which serves as our unique competitive advantage against other industry players – and our other infrastructure projects, including the Paranaque Integrated Terminal Exchange (PITX).
“At the same time, this strengthens our balance sheet and forms part of our medium-term financial management program.”
After the airport deal, Megawide’s consolidated debt-to-equity significantly improved to 1.9 times from a high of 2.6 times prior to the transaction.
The Company also used the proceeds to acquire PH1 World Developers, Inc. last July 2023 to forward-integrate into more scalable businesses, targeting largely the resilient, end-user segment of the housing market.
The transaction was in accordance with the Share Subscription and Transfer Agreement among Megawide, GMR Airports International BV (GAIBV), and AIC, which includes the issuance of Exchangeable Notes from both Megawide and GAIBV for the remaining 66.67 percent plus one share of AGMCAC’s outstanding capital stock amounting to P15.5 billion.
AIC’s P25 billion acquisition of shares in GMR MEGAWIDE Cebu Airport Corporation (GMCAC) started with the purchase of a 33.33 percent minus one share stake in GMCAC from Megawide and GAIBV for P9.5 billion.
In addition, Megawide and GAIBV simultaneously issued Exchangeable Notes to AIC amounting to P15.5 billion, which matured on Oct. 30, 2024, and was exchanged by AIC for the remaining 66.67 percent plus 1 share of GMCAC’s outstanding capital stock.