MANILA, Philippines - Megawide Construction listed P4 billion worth of perpetual preferred shares on the stock exchange, Wednesday.
Megawide chief financial officer Oliver Tan said 50 percent of the funds raised will be used for current public private partnership projects, while the other half will be earmarked for new PPP projects the company will bid for next year.
This means P2 billion is allocated for the Mactan-Cebu International Airport project, modernization of the Philippine Orthopedic Hospital, and Phase 2 of the School Building Project.
Another P2 billion is for future PPP projects such as the Kaliwa Dam Project, Intermodal Bus Transport System (Southwest Terminal) and various airport projects in Davao, Bohol, Bacolod, Iloilo, Puerto Princesa and Laguindingan.
Tan also said the company is in preliminary discussions with potential foreign, local partners for the P123-billion Laguna Lakeshore Expressway Dike Project, which is set to be one of the biggest PPP projects under the Aquino administration.
"We purchased bid documents, looking and studying that project… It’s something very feasible, 3 mega-projects combined into one," he said.
The company is targeting a 30/70 revenue mix between recurring income and its traditional construction business in the next 3 years. In the medium term, 5-7 years from now, Megawide plans to hit 50/50 revenue mix.
Currently, Megawide’s sole revenue source is its traditional construction business.
Tan said diversification will allow it to manage the cyclical nature of the property market.
"We’re very exposed to the cyclical nature of the property market. Three years ago, we started diversification outside our traditional construction business, we hope PPP will become a catalyst…. to get us where we want to go sooner.
Aside from PPP projects, the company is also working on 4 renewable energy plants. The two solar and two biomass projects, which will have a total capacity of 100MW. All four projects are currently in the project development stage.
Megawide hopes to complete permit work, preliminary engineering design by the first half of 2015. Construction is set to begin by the third or fourth quarter, and target completion is between 2016 to early 2017.
Recently, Megawide concluded a deal with low-cost housing company 8990 Holdings to construct 39 condominium buildings for the latter's township projects in Ortigas and in Tondo, Manila.
The Ortigas and Tondo projects each have an approximate contract value of P10 billion to P12 billion.