Venturing into airport development, Aboitiz InfraCapital Inc. has acquired P9.5-billion worth of shares from GMR-Megawide Cebu Airport Corporation, the developer and operator of the Mactan Cebu International Airport, the country's second busiest air hub.
In a stock exchange report on Friday, Megawide Construction Corp. said it agreed, along with its joint venture partner India-based GMR Airports International BV, to sell their 33.3 percent existing stakes in GMCAC to accommodate the entry of AIC through a Share Subscription and Transfer Agreement.
Megawide and GAIBV are joint venture partners for the 25-year Concession Agreement to develop, operate, and maintain MCIA. The transaction happened amid Megawide's move to "explore more resilient, high-growth, and scalable opportunities to anchor its long-term and sustainable growth agenda."
Under the agreement, Megawide and GAIBV should eventually allow the AIC to fully control the MCIA by issuing exchangeable notes with an aggregate value of P15.5 billion, which will mature by 30 October 2024. The notes will be exchanged by AIC for the remaining 66.66 percent of GMCAC's outstanding capital stock.
According to BDO Capital & Investment Corp., which acted as a financial advisor, the transaction is subject to the satisfaction of customary closing conditions including requisite third party and regulatory approvals.
"The transaction was accepted and deemed fair by all parties and aligned with their respective long-term goals.
For GMCAC, the infusion provides it with more financial muscle, a higher capitalization, a bigger balance sheet, and an improved gearing ratio. It also paves the way for the entry of another experienced and strong industry player," BDO Capital & Investment Corp. president Eduardo Francisco said.
Megawide takes resilient path
According to Megawide chairperson, CEO, and president, Edgar Saavedra, the move was in line with the company's strategy of constantly re-engineering its business and financial portfolio to support its vision of engineering a First-World Philippines.
"We have always been open to partnerships that will enhance our capabilities and diversify our portfolio as an infrastructure innovator. The Company's thrust of being an infrastructure innovator remains on track with this deal as we harness synergies with other major participants in the field," Saavedra said.
"From Megawide's perspective, the agreement enables us to crystallize the asset's fair market value and helps unlock resources that will accelerate our developmental infrastructure portfolio and allows us to strengthen our balance sheet, as part of our long-term financial management program," he added.
Megawide recently bagged several big-ticket projects, such as the Malolos-Clark Railway Project and the Metro Manila Subway System Project, to spearhead its pivot to infrastructure.
It is also exploring several transport-centric development locations to complement its hub-and-spoke model with the Parañaque Integrated Terminal Exchange and engaging in its brand of urban renewal through the Carbon Market Redevelopment.
