Megawide, GMR Airports count in Aboitiz Infra in Mactan Cebu Airport joint venture

Megawide Construction Corp. and its joint venture partner GMR Airports International BV (GAIBV) are trimming down their stakes in GMR-Megawide Cebu Airport Corp.(GMCAC), the developer and operator of Mactan Cebu International Airport (MCIA), to accommodate entry of Aboitiz InfraCapital Inc. into the airport venture.

Megawide and GAIBV executed a Share Subscription and Transfer Agreement with Aboitiz Infra for the latter to acquire shares in MCIA, the Saavedra-led infrastructure conglomerate said in a disclosure to the Philippine Stock Exchange on Friday.

Megawide and GAIBV are joint venture partners in GMCAC, which holds a 25-year concession to develop, operate, and maintain MCIA.

Both companies agreed to issue primary shares and the transfer of secondary shares in GMCAC to Aboitiz Infra for a total amount of P9,473,600,000.

The transaction will result in Aboitiz Infra owning 33.33% minus one share of the outstanding capital stock of GMCAC.

Megawide will retain 33.33% and one share while GAIBV will retain 33.33% in the MCIA operator.

At the same time, Megawide and GAIBV will issue Exchangeable Notes for the aggregate amount of P15,525,400,000, which will mature on October 30, 2024.

The notes will be exchanged by Aboitiz Infra for the remaining 66.66% and one share of GMCAC’s outstanding capital stock.

Megawide said the move to sell down stakes in GMCAC was in line with its strategy of constantly re-engineering its business and financial portfolio.

“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,” said Megawide chairman, CEO, and president Edgar Saavedra.

“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,” added Saavedra.

Megawide said that over the past years it has been receiving interest from several parties to join “its mission to modernize airport infrastructure in the Philippines, with the MCIA as the prototype.”

“We believe that we will be able to achieve our objectives with someone who shares the same vision, has a strong local presence, and embraces the same passion for infrastructure development and national progress. Aboitiz Infra has deep roots in Cebu and MCIA deserves another world-class, Cebuano company to sustain what GMCAC has built so far, and take it to the next level,” said Louie Ferrer, GMCAC president and Megawide’s executive director for Infrastructure Development.

BDO Capital & Investment Corp. acted as financial advisor to, and Romulo Mabanta Buenaventura Sayoc & de los Angeles and Shardul Amarchand Mangaldas & Co as legal counsels for, Megawide and GAIBV while AlphaPrimus Advisors acted as financial advisor to, and Gulapa Law as legal counsel for, Aboitiz Infra in the transaction.

“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, with a higher capitalization, bigger balance sheet, and an improved gearing ratio. It also paves the way for the entry of another experienced and strong industry player,” said BDO Capital & Investment Corp. president Eduardo Francisco.—AOL, GMA News