Thursday, July 2, 2009 | MANILA, PHILIPPINES [ BusinessWorld Online ]
LISTED CONDOMINIUM developer Megaworld Corp. is seeking the approval of regulators to list 4.1 billion in detachable warrants that would allow it to sell the same amount of underlying shares for P1 each, to partly fund spending for the next three years.
In a prospectus filed with the Securities and Exchange Commission, the Andrew L. Tan-led firm said stockholders who had participated in the firm’s P5.13-billion rights offering in May are entitled to four detachable warrants for every five shares bought.
New investors have the right to acquire one share for each warrant. The warrants can be exercised for five years, every 24th of the month from issue date.
The firm said outstanding shares would increase to 29.74 billion from 25.64 billion if all warrants are exercised. Megaworld said it has applied for the listing and trading of the warrants and underlying shares with the Philippine Stock Exchange.
Megaworld expects to raise net proceeds worth P4.07 billion from the warrant sale, which would be used to finance project expenditures for 2011 and 2012.
About a quarter of the proceeds would be spent for the development of an outsourcing center in its Newport City project near the Ninoy Aquino International Airport. The balance will be set aside for working capital.
Proceeds of the stock rights offering and the warrant sale are part of Megaworld’s fund-raising effort for a P30-billion spending program for the next three years. The firm kicked off the capital raising effort with the issuance of P1.4 billion in corporate notes last February.
The real estate developer, which builds condominiums for residential clients and office spaces for outsourcing companies, plans to spend P20 billion of its own cash for the three-year expansion plan.
The warrants will be listed and traded either on Dec. 14 or June next year. Banco de Oro Unibank, Inc.’s trust and investment group will serve as stock transfer agent.
Megaworld is expecting P4 billion in profits this year, up from P3.8 billion in 2008.
The property developer plans to spend P8 billion to P9 billion for projects this year, lower than the P10 billion spent last year. It also plans to launch five new residential projects worth P12 billion, namely Two Central in Makati City, one in Eastwood City, Palmtree in Newport, and phase two of The Venice and Morgan Suites in Taguig’s Fort Bonifacio.
Megaworld is finalizing plans for its 40-hectare project at the entertainment complex being built by the state gambling monopoly, and is already completing a plan to build an "iconic building" on a five-hectare lot at Paseo de Roxas in Makati.
It plans to build two more Richmonde Hotels in Quezon City’s Eastwood commercial center and in Binondo, Manila. The company already has one in Ortigas.
The Richmonde Hotel in Eastwood will have 150 to 175 rooms and is expected to open next year while plans for the Manila-based Richmonde have yet to be finished.
Subsidiary Travellers International Hotel Group, Inc., will also venture into budget hotels under the Remington brand, with up to 800 rooms. High-end hotels — the six-star Maxim and Marriott — will likewise be built near the airport.
Megaworld shares closed P0.02 lower yesterday at P0.96 apiece. — Don Gil K. Carreon
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