MEG files for Php27.3bn REIT IPO
(MEG, Php3.28; BUY, TP:Php4.70)

Megaworld Corporation (MEG) has filed a registration statement for its real estate investment trust unit MREIT, Inc.’s first public offering (IPO) (MREIT).

MREIT plans to sell up to 1.2 billion secondary shares at a maximum offer price of Php22.00 per share. The proceeds from the IPO may total up to Php27.3 billion, which MEG intends to utilize to fund 16 current real estate projects. The offer shares constitute 49 percent of MREIT’s total issued and outstanding shares, implying a market value of Php55.7 billion.

MREIT’s portfolio will include ten office, hotel, and retail properties with a total gross leasable area (GLA) of 224,430sqms. These are mainly leased to BPO tenants, and MREIT has little POGO risk. The occupancy rate was 95%, which was comparable to the peer average.

The properties are in MEG’s main townships, notably Eastwood City, McKinley Hill, and Iloilo Business Park. These assets have an assessed worth of Php55.6 billion, ranking second among listed and potential REITs.
It is worth noting that MREIT’s 10 buildings account for just 16 percent of MEG’s overall office GLA portfolio of 1.4 million square meters, the biggest among listed property firms; therefore, MREIT has significant growth potential via future property injections. MEG has already identified four more properties that will be added to MREIT over the next four years.

According to the registration statement, at the offer price of Php22.00 per share, dividend yields for fiscal years ending June 2022 and 2023 are 4.1 percent and 4.5 percent, respectively.


GCash eyes public offering
(GLO, Php1,878.00; BUY, TP:Php2,100.00)

GCash, Globe Telecom, Inc.’s (GLO) mobile wallet, plans to launch an initial public offering (IPO) to generate money for growth in response to the pandemic’s rise in demand for digitalization.

Globe Fintech Innovations, Inc. (Mynt), GLO’s fintech subsidiary, operates GCash.

No further information about the proposed IPO was revealed.

Nonetheless, we think that the sale will enable GLO to acquire money in order to continue expanding its subscriber base through different GCash product developments.

3. DNL

DNL to offer up to Php5.0bn fixed-rate bonds
(DNL, Php8.15; HOLD, TP:Php8.60)

D&L Industries, Inc. (DNL) has filed a registration statement and preliminary prospectus with the Securities and Exchange Commission (SEC) for its Php3.0 billion fixed-rate bonds, with an oversubscription option of up to Php2.0 billion.

Three-year series A bonds due in 2024 and five-year series B bonds due in 2026 are included in the offering. The bond’s interest rate has not yet been revealed.

If exercised, the oversubscription option will bring the total proceeds to Php5.0 billion, which would be utilized mainly to fund the company’s capital expenditures (capex), repay bridge loans and interest expenses, and for other corporate reasons.


DITO reaches 1.0mn subscribers

Since its commercial debut on March 8, Dito Telecommunity Corporation (Dito Tel) has exceeded the 1.0 million subscriber milestone. This equates to less than 1% market share when the subscriber bases of mobile heavyweights PLDT, Inc. (TEL) and Globe Telecom, Inc. (GLO) are 71.8 million (47%) and 79.8 million (52%) respectively as of 1Q2021.

Commercial services from Dito Tel are now accessible in over 120 cities and municipalities throughout the country. By the end of the month, the business hopes to have expanded to 150 locations.

To recap, DITO CME Holdings Inc. (DITO) is in the process of purchasing 100 percent of Udenna Communications Media and Entertainment Holdings Corp. (Udenna CME) in a share-for-share deal with Udenna Corp. Prior to the share exchange, Dito Holdings Corporation acquired the combined 60 percent ownership in Chelsea Logistics and Infrastructure Holdings Corp. (C) and Udenna of Dito Tel (DHC). Thus, following completion of the share exchange, DITO will become the indirect parent company of Dito Tel. The deal has not yet been approved by the Securities and Exchange Commission.


ACEN invests Php415.0mn in subsidiary for future projects

AC Energy Corp. (ACEN) has subscribed for Php415.0 million worth of Buendia Christiana Holdings Corp. (BCHC) shares in order to fund the purchase of prospective project locations. BCHC is ACEN’s special purpose entity for the purpose of acquiring land for its parent company’s development initiatives.

6. APL

APL receives MGB compliance certification

APL informed the Exchange that JDVC Resources Corp. received two certificates from the Mines & Geosciences Bureau (MGB) for its mineral production sharing agreement (MPSA). The certificates demonstrate that JDVC complies with the MPSA’s requirements and has received permission for a three-year development work plan, among other things.


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