Listed contractor Megawide Construction Corp. said it is keen to bid for airport projects under the public-private partnership (PPP) scheme of the government, as well as securing more renewable energy projects in line with its target to leverage on the promise of the “Golden Age of Infrastructure” during the six-year Duterte administration.
“We’d like to be very strong in airports and also in the renewable energy sector. But if you look at it, we just started,” Michael Cosiquien, Megawide Chairman and Chief Executive Officer, said in a press briefing after the company’s annual stockholders meeting on Friday.
“With regards to the other PPPs, definitely, we will be interested in any airport project like NAIA or Clark. That’s where we are right now. Our track record in Mactan and what we’re doing, by the time we’ll be finished with Terminal 2 in 2018, we’ll be ready to bid for other airport PPPs,” Cosiquien said.
On September 14, the National Economic and Development Authority (NEDA) Board approved the P74.56-billion PPP contract to upgrade all four terminals of the Ninoy Aquino International Airport (NAIA), which is now at the stage of submission of bidders’ pre-qualification documents.
The Department of Transport (DOT) is also moving to put the contract to develop Clark International Airport up for auction until the first half of next year in a bid to decongest NAIA and transfer some of the domestic flights in the Clark airport.
Megawide — together with its partner GMR Infrastructure Ltd. — is now working on numerous PPP projects, including the P3.5-billion Southwest Integrated Transport System in Parañaque, for which construction will start in the fourth quarter of this year and finish by 2018; Terminal 2 of the P17.85-billion Mactan-Cebu International Airport (MCIA), which is also to be completed by 2018; and Phase 2 of the Philippine School for Infrastructure Project (PSIP).
The company already completed the Phase 1 of the PSIP PPP project in April 2015.
To date, the Megawide-GMR consortium is pre-qualified to bid for the five regional airports projects, which are P40.57-billion Davao Airport, P30.40-billion Iloilo Airport, P20.26-billion Bacolod Airport, P14.62-billion Laguindingan Airport, and P4.57-billion New Bohol (Panglao) Airport, as well as the P50.20-billion Regional Prison Facilities PPP project in Nueva Ecija.
Cosiquien said the firm also sees renewable energy as an attractive sector, and is looking to expand its power business segment. Under its subsidiary Citicore Power Inc., Megawide has built three solar farms with over 100 megawatts total capacity in Bataan, Negros Occidental, and Cebu.
Moving forward, the company is looking at engineering, procurement and construction contracts (EPC) for battery storage, solar, wind, hydro and biomass power generation, as well as folding in Citicore Power into Megawide as early as next year.
Asked if the company is interested in bidding for rail PPP projects, Cosiquien said, “For the other rail projects, it’s a wait and see for us. We’re talking to some groups but there’s nothing definite yet.”
With its vast pipeline of PPP and other construction projects, Megawide Chief Financial Officer Oliver Tan said the company is considering raising funds in the capital markets through selling its 410 million treasury shares via private placement next year, if not within this year.
“Yes, we are considering or we may consider going back to the capital markets depending on the immediate requirements for these PPP projects that we will be participating in,” Tan said.
“Well, there are several options available, but primarily we will [raise funds]by treasury shares. We can re-issue these treasury shares, these are basically the shares that the company bought back recently, which is almost 18 percent or 410 million shares. Depending on the market condition, quite possible before the end of the year,” he said.
“It’s easier to do a private placement compared to public offering [where]you have to go through all regulatory compliances. All of them are options. But I think the end result will be to expand the shareholder base so be it a mix of foreign, purely domestic, or strategic investor. At the end of the day, we would want to achieve a wider shareholder base to improve liquidity,” he added.
For the whole of 2016, Megawide is targeting P17 billion revenues, which is about 20 percent higher than its sales in 2015, while its net profit is expected to reach P1.9 billion, 25 percent more than recorded a year ago.
“These [targets]will be [coming]from the contributions from our core construction business and airport operations from the Mactan Cebu International Airport,” Tan said.
At present, about 90 percent of the company’s revenues come from its core construction business while 10 percent are from airport operations. Of the construction business, half of it comprises commercial offices projects, 20 percent is in mass housing with partner 8990 Holdings Inc., 12 percent from power, and the rest from residential condominiums.
Established in 2001, Megawide is engaged in the construction of office buildings, houses and condominiums, roads, power plants, bridges, piers, waterworks, railroads, and airports, among others.