By Jenniffer
B. Austria | Posted on Dec. 10, 2012 at 12:01am
[
manilastandardtoday.com ]
Citicore-Megawide
Corp., a joint venture between listed construction company Megawide Corp. and
parent Citicore Holdings Investment Inc., raised P6.5 billion from the issuance
of fixed rate notes, which it will use to finance the building of schools for
the Education Department.
Megawide
chief finance officer Oliver Tan said during the signing ceremony the 10-year
fixed rate notes were oversubscribed, with total demand reaching P8.1 billion.
“The P6.5
billion, together with the equity of P2 billion for a total of P8.5 billion,
will be sufficient to meet funding for the phase 1 of the two packages,” Tan
said.
The
Megawide-Citicore partnership in August won a bidding for the contract to
build school infrastructure projects of
the DepEd under the so-called Public-Private-Partnership scheme of the
government.
Megawide
under the build-lease-transfer agreement will construct 2,885 classrooms in
Region 3 and 4,259 classrooms in Region 4-A.
In exchange,
the government will make annual lease payments of P532 million for Region 3
classrooms and P760 million for Region 4-A classrooms over the next 10 years.
The two
contracts form part of the government’s plan to build around 9,300 three- and
two-story classrooms.
PNB Capital
was the lead arranger and sole bookrunner for the notes facility while
Development Bank of the Philippines and Land Bank of the Philippines were
co-lead arrangers.
The
noteholders include Metropolitan Bank & Trust Co., Bank of the Philippine Islands,
PNB, LandBank, DBP and Bank of Makati.
Tan,
meanwhile, said the company expects to achieve a net income of P900 million
this year and post revenues of P8 billion to P8.5 billion.
Tan said the
company was slowly diversifying its construction portfolio with its foray in
the PPP project.
Megawide has
generated the bulk of construction revenues from the residential projects of SM
Development Corp., owned by retail magnate Henry Sy.
The Sy family
holds a minority interest in Megawide.
Tan said SM
Development now only accounted for 50 percent of the company’s revenues from a
high of 73 percent. Megawide also started to book revenues from office
buildings and hotels.
“Moving
forward we are looking to book more on social infrastructure projects like schools
and hospitals. That would somehow give us a more balance and diversified book
order,” Tan said.
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