Tan hikes funds in Megaworld by $90M

By Honey Madrilejos-Reyes
Reporter

BUSINESSMAN Andrew Tan has invested at least $90 million (around P4.5 billion) more into listed property firm Megaworld Corp.
           
Megaworld executive director Kingson Sian said Tan’s personal investment is an indication of the tycoon’s confidence in the growth prospects of the company given its portfolio of projects.
           
Tan, who is the chairman of Megaworld, is the single biggest shareholder of the company with a stake of 45 percent.
           
Megaworld is scheduled to conduct a stock rights offering in January 2007, which could raise P10 billion worth of proceeds. The offering would allow the company’s existing shareholders to buy a proportional number of additional securities at a given price (usually at a discount) within a fixed period.
           
Of the total estimated proceeds, P4 billion would go to the development of City Place in Manila; P1 billion for the building of the 10-story E-Commerce Plaza in Eastwood, Libis, Quezon City; P3 billion for landbanking; and P2 billion for working capital.
           
Around 5.89 billion common shares, which would come from the unissued capital stock and from an increase in authorized capital stock of the company, would be offered to existing stockholders of Megaworld as of record date.
           
Megaworld stockholders may subscribe to two rights share for every five common shares they hold as of record date. The offer price would be based on a 10 percent to 30 percent discount to the last 10 trading day’s volume weighted average price of its common shares.
           
The offer price would be determined on December 7, while the offer period would start on January 2 until January 9.
           
“Megaworld has been growing at a remarkably rapid pace, and we want it to sustain the same rapid pace of growth year after year for as long as we can,” said Tan.
           
He viewed the stock rights offer as an opportune undertaking that would help Megaworld to maintain a leadership position in two robust segments of the property market—residential condominium and business process outsourcing. He cited the home financing market as an exciting sector “about to take off” that makes home ownership affordable for many first-time buyers.
           
Megaworld signed last Thursday an agreement with Security Bank for the offering of affordable financing facility to homebuyers.
           
Called Homelite, the program makes owning a home easy with fixed interest rates and payment terms that are among the most competitive in the market. Starting this month, Homelite would be available exclusively to buyers of Megaworld’s residential projects such as the Manhattan Garden City project at the Araneta Center in Quezon City.
           
Homelite comes in a choice of up to 10 budget-friendly packages. Among them are Homelite 10, which charges 8.5 percent interest per year fixed for 10 years; Homelite 15, which keeps the interest rate at 9.75-percent annually for 15 years; and Homelite 25, which is available at 11-percent interest a year fixed for 25 years.
           
Megaworld shares on Thursday rose 1.87 percent to close at P2.18.