MEGAWIDE Construction Corp. said it bought back 17 percent of its own shares and acquired 100 percent of its sister company Citicore Power from parent firm Citicore Investment Holdings, for an aggregate amount of about P18 billion.
The series of acquisitions is in line with its five-year plan to transform into a fully diversified infrastructure conglomerate.
Megawide, which is one of the largest construction and infrastructure companies in the country, announced over the weekend that it bought back some 410.84 million of its shares held by the SM Group’s Sybase Equity Corp., representing 17 percent of its total issued and outstanding shares.
The shares were reacquired at P10.04 apiece for a total amount of P4.12 billion. Megawide had sold the shares at P7.84 each during its initial public offering in 2011.
Michael Cosiquien, chief executive officer of the company, said in a statement that the share buyback will be funded by internally generated funds.
The company also announced the 100 percent acquisition of renewable energy company Citicore Power from its parent firm Citicore Investment Holdings.
Although it did not disclose the transaction amount, Citicore Power operates three solar power projects in the provinces of Bataan, Negros Occidental and Cebu with a total capacity of 103 megawatts (MW). At a valuation of $2 million to $3 million per megawatt, the three assets are estimated to be worth a combined P14 billion.
Cosiquien explained that the acquisition of Citicore Power will be by way of a share swap through third-party independent valuation.
“We set out with our five-year plan in 2011. The IPO was set up with the vision to transition from pure construction to a well diversified infrastructure and engineering conglomerate. Now we have achieved that, we want to pursue stronger, wider-ranging recurring sources of revenue,” said Oliver Tan, Megawide’s chief financial officer.
With a goal to produce 1000 MW of clean energy, Megawide said Citicore Power will tap the widest range of renewable energy sources such as solar, biomass, wind, and hydropower.
Megawide said that under the new structure, it would have four core businesses—construction, airport operation, transport, and power generation with a focus on renewable energy.
“Megawide is already at its prime as a construction company. This is a natural progression. We are taking the company further,” Cosiquien said.