Megawide Construction Corp. is further diversifying into an infrastructure conglomerate after "hitting its prime" as a construction and engineering company, officials said over the weekend.
The diversification would allow the company to get into more industries such as power and related industries and not just construction. The company unveiled its five-year diversification plan with four core businesses under the new structure.
These are construction, airport operation, transport and power generation with a focus on renewable energy. In power, the company announced the 100 percent acquisition of Citicore Power, a renewable energy company under the Citicore brand, from affiliate Citicore Holdings Inc.
Citicore Power is committed to produce 1000 Megawatts (MW) of clean energy through the widest range of RE sources such as solar, biomass, wind, and hydropower It currently operates three solar power projects in the provinces of Bataan, Negros Occidental and Cebu, which together account for more than one hundred megawatts of power going into the national grid. element-invisibleBusiness ( Article MRec ), pagematch: 1, sectionmatch: 1 Megawide chief financial officer Oliver Tan said the diversification is part of the company's vision when it went public in 2011.
"The IPO was set up with the vision to transition from pure construction to a well diversified infrastructure and engineering conglomerate. Now we have achieved that, we want to pursue stronger, wider-ranging recurring sources of revenue," Tan said.
Last week, Megawide announced the buy-back of 410,842,702 shares from Sybase Equity Investment Corp. with an equivalent of 17 percent total issued and outstanding shares as of June 30, 2016.
Sybase Equity Investments, which is owned by the family of retail tycoon Henry Sy, acquired the shares during Megawide's Initial Public Offering in 2011. "Megawide is already at its prime as a construction company.
More than ever, it is capable of providing the most basic and one of the important components of these businesses, and that is EPC," said Megawide chief executive officer Michael Cosiquien. "This is a natural progression.
We are taking the company further," he added. Sybase board representative Elizabeth Anne Uychaco said the diversification gives Megawide the flexibility to go into power generation and related industries.
In 2015, construction contributed 66 percent of total income, with the airport business bringing in 34 percent. Megawide has been in the airport business after it acquired the concession to operate Mactan Cebu International Airport (MCIA) in 2014.
The company has also diversified into transport and energy. In transport, the company's Southwest Integrated Transport Terminal (SWITS) is positioned as its entry into the progressive property sector SWITS is expected to bring in a mix of transportation infrastructure supported by mixed-use retail and commercial recurring revenues.
Source: 4 Traders