THE sale of Megawide Construction Corp.’s shares in GMR-Megawide Cebu Airport Corp. (GMCAC) to Aboitiz InfraCapital Inc. (AIC) will allow Megawide to manage some of its obligations and expand on some land and digital infrastructure projects.

But why has the Aboitiz family been picked to take over the Mactan-Cebu International Airport (MCIA)?

Megawide president and chief executive officer Edgar Saavedra said several local and foreign groups have shown interest in joining GMCAC, but they found Aboitiz the most sincere and fit and ready in terms of organization to operate the airport.

He said Aboitiz is more stable, shares the same values as Megawide, more advanced, has OPS in other provincial airports and has a strong local presence.

Louie Ferrer, GMCAC president, on the other hand, said the inclusion of Mactan Airport under Aboitiz control will boost the airport’s portfolio and the growth of the entire community.

Saavedra said the proceeds of the shares’ sale will help Megawide manage its loans and other obligations.

Saavedra said the airport was losing money for the last two years of the pandemic, with Megawide topping P1.2 to 1.4 billion every year.

Ferrer said passenger traffic at MCIA pre-pandemic was at 35,000 per day, but it went down to 1,000 to 4,000 a day during the pandemic, especially with the travel restrictions.

According to the most recent MCIA statistics, there were more than two million passengers in the first half of 2022, a 350 percent increase over the 470,000 passengers in the same period last year.

“The past two years were difficult, mahirap talaga, naglisod gyud me,” Ferrer said in a media interview.

GMCAC operations

Ferrer said they have an internal agreement with AIC that the GMCAC management will continue in the next five years.

He also assured that none of the 180 manpower at GMCAC will be displaced once AIC fully takes over the airport operations.

Proceeds

Proceeds of the sale, Saavedra said, will allow Megawide to manage its obligations and expansion in land transportation, social infrastructure and affordable housing projects.

Megawide is also looking into digital infrastructure such as data centers.

GMCAC shall utilize a portion of the primary infusion to acquire certain identified entities providing services at MCIA.

Megawide is exploring several transport-centric development locations to complement its hub-and-spoke model with the Parañaque Integrated Terminal Exchange and engaging in its own brand of urban renewal through the Carbon Market Redevelopment.

Ferrer said Megawide’s Carbon Project in Cebu City has attracted other local government units in Cebu and other parts of the country.

Megawide and foreign partner GMR Airports International BV (GAIBV) recently announced the sale of their holdings in GMCAC, the operator of MCIA, to AIC.

The partial sale of shares of GMCAC is worth P9.5 billion, a combination of issuance of primary shares and transfer of secondary shares, for AIC to acquire 33.33 percent minus one share of the outstanding capital stock of GMCAC.

In parallel, P15.5 billion in exchangeable notes will be issued. This note will mature on Oct. 30, 2024. Upon maturity, this exchangeable note can be exchanged for the remaining shares of GMCAC, said Jez Dela Cruz, Megawide’s vice president for Corporate Finance and Financial Planning.

By 2024, AIC will have 100 percent ownership of GMCAC after the concession lockup period, Dela Cruz added.