Megawide gets debt leeway

Listed Megawide Construction Corp. will save up to P4.5 billion in cash for the next three years after it was allowed by lenders to extend its debt payments until the end of this decade.

In a recent disclosure, Megawide subsidiary GMR Megawide Cebu Airport Corp. (GMCAC) said its lenders agreed to relax the firm’s debt servicing and covenant commitments to rebalance its financial sheet during the pandemic.

As such, GMCAC can preserve P4.5 billion worth of cash that was allocated to settle debts, but can now be deployed to sustain operations in the face of weakened demand for air travel.

On the other hand, GMCAC committed to pay the amount throughout the life of the loans. Bulk of the servicing will be completed between 2027 and 2029.

BDO Capital and Investment Corp. served as the financial advisor for the transaction. It crafted a proposition to revise the original deadline for the 15-year, P23.9 billion project financing for the firm’s 25 year concession to put up, manage and improve Mactan-Cebu International Airport. 

BDO Capital president Ed Francisco said the pandemic requires the private sector to act as one in ensuring that investments will survive the health crisis and its economic impact.

“Assessing the current situation, multi-sectoral cooperation will be very crucial for the country’s economic takeoff once smoke from this pandemic clears,” Francisco said.

Francisco also said banking institutions here and abroad should assist private firms to generate confidence in their business models, as well as in the national economy.

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