By Beatriz Marie D. Cruz, Reporter
PROPERTY DEVELOPER Megaworld Corp. has launched a P2-billion share buyback program while allocating P2.21 billion raised from its listed real estate investment trust unit Megaworld Real Estate Investment Trust, Inc. (MREIT) for township projects in Cebu, Palawan, and Bacolod.
The buyback program will run for 24 months starting Thursday, the company said in a regulatory filing.
“The board believes that current market prices do not reflect the true value of the company’s shares and seeks to enhance shareholder value through a share buyback program,” Megaworld said.
The program will be funded internally, with the purchased shares to be booked as treasury shares.
Share purchases will be made through the trading facilities of the Philippine Stock Exchange (PSE), it added.
As of end-August, the company had an authorized capital stock of P45.7 billion, consisting of 45.64 billion common shares with a par value of P1 apiece and six billion voting preferred shares with a par value of P0.01 each.
Of the authorized capital, 32.56 billion common shares and six billion preferred shares are issued and outstanding, with 1.19 billion treasury shares.
“The buyback is positive for shareholders as it will support the company’s stock price and increase earnings per share over time,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.
“Megaworld’s financial resources and profitability can easily bankroll the buyback while keeping their capital expenditure plans on track,” he added.
In a separate disclosure, Megaworld said it will allocate the P2.21 billion raised from its recent sale of MREIT shares to fund projects in its Cebu, Palawan, and Bacolod townships.
“Megaworld intends to use net proceeds received from the sale to fund ongoing and future investments in real estate properties in three townships located in Cebu, Bacolod, and Palawan or the development of malls, offices, and other developments within each township, which Megaworld may undertake on its own or through other subsidiaries,” it said.
“While the company is not contemplating acquiring land at this time, there is nothing preventing it from doing so in the future in accordance with the requirements of the law, if the timing and opportunity is right,” it added.
Megaworld is set to disburse P845 million for the Paragua Coastown project in Palawan, which is 42% completed and expected to be finished by 2028.
It is also allocating P830 million for The Mactan Newtown in Cebu, which has a 73% completion rate and is scheduled for completion in 2028.
The remaining P537.92 million has been earmarked for upcoming malls, offices, and land developments in Bacolod, the company said.
Megaworld said it will submit quarterly progress reports and a final reinvestment plan report to the PSE, certified by its chief financial officer, treasurer, and external auditor.
In the second quarter, Megaworld’s attributable net income rose by 35% to P5.6 billion from P4.15 billion a year earlier, driven by growth in its leasing, residential, and hospitality segments.
Its first-half attributable net profit climbed by 25% to P10.7 billion from P8.55 billion last year.
At the local bourse on Thursday, Megaworld shares fell by 0.98% or two centavos to close at P2.02 apiece, while MREIT shares slipped by 0.88% or 12 centavos to P13.48 each.
