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Megaworld consolidates property businesses

Posted on June 21, 2013 08:05:16 PM [ BusinessWorld Online ]
TYCOON Andrew L. Tan is moving to consolidate his real estate assets under Megaworld Corp., based on a company disclosure on Friday.
The move comes barely a month after the SM Group announced that it was merging its property assets under SM Prime Holdings, Inc., creating the largest property firm in terms of market capitalization.
"Megaworld seeks to consolidate the real estate businesses of its affiliates under the Megaworld brand to better capitalize on real estate opportunities and capture the expected growth momentum of GERI (Global-Estate Resorts, Inc.), ELI (Empire East Land Holdings, Inc.) and Suntrust Properties, Inc. within the next five years," the company said.
Megaworld said it subscribed on Friday to 2.5 billion shares from Global-Estate at par value of P2.26 per share for a total value of P5.65 billion.
Of the total subscription, 25%, worth P1.4125 billion, will be paid on June 26, while the remaining P4.2375 billion will paid upon the Securities and Exchange Commission's approval of the transaction, the firm said.
In a separate disclosure, mixed-use developer Empire East said 1.2 billion of its shares had been acquired by Megaworld at P1.05 per share. The total price of P1.26 billion will be paid on June 26.
Last week, Megaworld acquired 100% of Suntrust, for nearly P600 million. Suntrust has housing developments in Cavite, Laguna and Manila.
Officials were not immediately available for additional details, such as Megaworld's ownership in Global-Estate and Empire East, after the transactions.
The SM Group announced last month that mall builder SM Prime Holdings, Inc. will be the holding company of the Sy family's real estate firms SM Development Corp., SM Land, Inc. and other hotels and convention centers owned by the family.
Meanwhile, Megaworld's net profit stood at P1.82 billion in the first quarter, up by 15.19% from P1.58 billion in the same period last year.
Revenues grew by 16.43% to P8.15 billion from P7.00 billion in the same comparative periods.
Costs and expenses increased by 18.96% to P6.33 billion from P5.32 billion year-on-year.
Shares of Megaworld dropped 21 centavos or 5.93% to P3.33 apiece on Friday. -- Cliff Harvey C. Venzon
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