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Alliance Global hikes stake in Megaworld

Posted on October 05, 2012 08:06:26 PM [ BusinessWorld Online ]

CONGLOMERATE Alliance Global Group, Inc. has raised its stake in its mid-range real estate arm, Megaworld Corp., after it converted roughly P3.07 billion worth of Megaworld warrants into shares, the mother company said in a disclosure to the Philippine Stock Exchange (PSE) on Friday.

"Alliance Global and its wholly owned subsidiary, New Town Land Partners, Inc., exercised today (Oct. 5) 3,071,713,375 Megaworld warrants at the exercise price of P1 per share, for a total exercise price of P3.0717 billion," the disclosure read.

A warrant is as a derivative security issued by firms that gives holders the right to purchase securities such as shares from an issuer at a specific price within a set period.

Back in 2009, Megaworld listed on the local bourse 4.1 billion detachable warrants issued from a prior 4:5 company stock rights offering. Megaworld had said it was expecting roughly P4 billion in proceeds from the exercise of all the warrants, which would then be used to finance capital and project expenditures from this year until 2015.

As a result of the equity conversion, Alliance Global now holds 12,076,569,792 shares in Megaworld, up 34.11% from 9,004,856,417 shares held as of end-June, as reflected in a regulatory filing filed that month.

Megaworld, incorporated in 1989 as Megaworld Properties and Holdings, Inc., is currently engaged in the development of large-scale, mixed-use master-planned townships, information on PSE’s Web site showed.

Since its formation, the firm claims to have launched approximately 225 residential, office, and hotel units, bringing its aggregate property footprint to over 5.8 million square meters, according to its end-June financial report.

Megaworld said last April was allotting P25 billion this year to bankroll capital spending, with 11 residential projects having been targeted for launch in the first half alone.

Alliance Global, incorporated in 1993 and listed on the PSE in 1999, had initial investment in glass-container manufacturing in Canlubang, Laguna, according to information on PSE’s Web site.

It has grown into a holding company engaged in food and beverage businesses, real estate, and quick-service restaurants targeted at the country’s growing middle class.

The conglomerate earmarked last March a P35-billion capital budget for 2012, to be sourced from internally generated funds, mostly to fund the company’s ongoing real estate and tourism developments.

The company grew its net income by 21.40% to P5.73 billion in the first half from P4.72 billion last year, its latest financial statement showed. Its revenues rose 68.83% to P51.07 billion from P30.25 billion in the same comparative periods, while costs and expenses climbed 79.33% to P40.35 billion from P22.50 billion.

Shares of Alliance Global slid 1.89% to P14.50 on Friday from P14.78 last Thursday, while those of Megaworld rose 3.06% to P2.36 from P2.29. -- F. J. G. de la Fuente
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