Mreit Inc., the listed real estate investment trust of developer Megaworld Corp., has sold some 279.4 million common shares through an overnight placement.
The said shares owned by Megaword were sold for P13 per share, or a discount of about 8 percent from Friday’s close of P14.10 at the Philippine Stock Exchange.
The company said it raised P3.63 billion from the transaction.
“At the Mreit level, we are pleased to have several institutional investors on board. This investment demonstrates confidence in Mreit’s potential as a strong and attractive long-term investment opportunity,” Kevin Andrew L. Tan, the company’s president and CEO, said.
The proceeds from the sale will be settled within 3 trading days after the shares have been crossed.
UBS AG, Singapore Branch acted as sole placement agent for the transaction.
On the back of strong demand led by domestic and international long-only investors, the transaction was upsized by 10 percent from 254 million shares, the company said.
Megaworld said it continues to be committed as a sponsor and the transaction increases Mreit’s free float which provides headroom for future acquisition of assets via property for share swap.
“[Megaworld] will be using the proceeds from the transaction to fund further development of high quality commercial assets, helping to build on its existing portfolio and thereby expanding the pipeline of potential acquisition opportunities for Mreit,” the company said without further elaborating.
All the Mreit shares sold in the transaction are owned by Megaworld and are secondary shares, ensuring that the ownership of existing shareholders of Mreit will not be diluted.
Megaworld said it will continue to hold a majority stake in Mreit with a 55.6-percent ownership.
Last month, Mreit also announced the signing of a memorandum of understanding with its sponsor, Megaworld, for the possible acquisition of 7 office assets from Megaworld with a total gross leasing area of 150,500 square meters.
These assets are from Megaworld townships McKinley Hill, McKinley West, Iloilo Business Park, and Davao Park District. If concluded, Mreit’s portfolio will grow to 475,500 square meters, an increase of 46 percent from the current 325,000 square meters.