MREIT Inc. said Friday its sponsor, Megaworld Corp., the property development venture of tycoon Andrew Tan, raised P500 million from the sale of shares equivalent to a 1.5 percent stake of the listed real estate investment trust.
Funds raised by Megaworld bankroll development of certain projects that would eventually be injected into the listed REIT.
Megaworld sold the 40.65 million MREIT shares at a price of P12.30, a discount to the stock’s market price, to “a reputable, long-term institutional investor.” MREIT stock closed Thursday at P12.84, still within its 52-week trading range of P11.54 and P15.90.
All the MREIT shares sold are owned by Megaworld, ensuring there won’t be any ownership dilution as a result of the sale. The transaction will also raise the public float of MREIT to 44.4 percent, building enough headroom for future property-for-stock swaps with Megaworld.
“MEG will allocate the proceeds from the transaction to enhance its development pipeline, further expanding the opportunities for MREIT. Following the transaction, MEG will maintain a majority stake in MREIT, holding 54.2 percent of the ownership and will remain committed as its sponsor. This investment underscores the confidence in MREIT’s potential as an attractive and valuable long-term investment opportunity,” said Kevin Tan, president and chief executive officer of MREIT.
Last year, MREIT signed a memorandum of understanding with Megaworld for the possible acquisition of seven grade A office assets from its sponsor with a total gross leasable area of 150,500 square meters. It would expand MREIT’s portfolio by46 percent to 475,500 sqm if completed.
“We are on track to expand MREIT’s total GLA to 500,000 sqm by end-2024. This highlights our commitment to continuously enhancing shareholder value and fostering MREIT’s growth,” Tan said.
