Megawide Construction Corp. expects to strengthen its financial position following its acquisition of a minority stake in Citicore Renewable Energy Corp. (CREC).

In a disclosure to the stock exchange on Friday, the company said it secured 1.1 billion secondary shares—equivalent to 9.88 percent of CREC’s outstanding common stock—through a block sale with Citicore Power Inc. (CPI), CREC’s parent firm. The transaction is non-dilutive for existing shareholders.

The acquisition forms part of the settlement of advances between Megawide and the Citicore group, which was agreed upon on 10 September. The remaining P1.5 billion balance is expected to be settled by year-end.

Megawide Chairman and Chief Executive Officer Edgar Saavedra said the transaction highlights cooperation within the Megawide-Citicore Group and strengthens Megawide’s balance sheet and equity position.

“The transaction signifies the strong intra-company cooperation within the bigger Megawide-Citicore Group to achieve a shared objective—that is to create and maximize shareholder value. For Megawide, this asset injection will strengthen the company’s balance sheet and overall equity position,” Saavedra said.

He added that the CREC shares, valued at around P4.9 billion based on the last closing price, represent a significant addition to Megawide’s market capitalization of P6.6 billion.

“From a valuation standpoint, the infusion represents an additional boost to our existing market capitalization and immediate upside to shareholders and investors,” he said.

Megawide has been repositioning for growth this year, recently securing two major projects with Megaworld Corporation. It also expressed interest in joining the government’s Pambansang Pabahay Para sa Pilipino (4PH) housing program.

CPI President and CEO Oliver Tan said the settlement marks a new phase of partnership between the companies.

“The assistance extended by Megawide way back in 2016 was crucial in incubating our renewable energy platform and enabling Citicore to power up to where it is now. From the seed capital of P6.0 billion via advances back then, this allowed us to list two entities—CREC and CREIT—with an attributable market capitalization of around P37.0 billion. As part of good housekeeping and stronger corporate governance, we have settled these outstanding balances so Megawide can engineer its growth agenda,” Tan said.