MREIT Inc. is hiking its authorized capital stock to P8 billion from P5 billion as it plans to acquire additional income-generating assets from its parent firm, Megaworld Corp.
The real estate investment trust company said in a disclosure to the stock exchange on Monday that the move follows a memorandum of understanding signed with Megaworld, outlining a planned share swap transaction involving real estate assets.
“MREIT intends to acquire the target growth assets to secure income growth and provide a competitive investment return to its shareholders,” the company said.
Under the agreement, Megaworld will exchange the assets and/or cash for new primary common shares of MREIT, priced at an average of no less than P14.39 per share. The price reflects a premium over the 30-day volume-weighted average price of MREIT shares before the deal.
The company has not yet disclosed the details of the share swap, including property valuations and the final terms of the exchange.
The proposed capital stock increase will expand MREIT’s share base from 5 billion to 8 billion common shares, with a par value of P1 apiece. The company said it would submit the application for the capital increase to the Securities and Exchange Commission.
Megaworld has initially subscribed to 25 percent of the P3-billion capital increase, or P750 million, equivalent to 750 million shares. It has paid P187.5 million in cash, representing 25 percent of that subscription.
Megaworld holds a portfolio of income-generating assets, including about 1 million square meters of office space and 500,000 square meters of retail space.
MREIT earlier reported plans to infuse mall and retail assets into its portfolio to diversify its holdings, in line with the group’s strategy to double its gross leasable area (GLA) to 1 million square meters by 2027.MREIT’s 482,000 square meters of leasable space is expected to reach 600,000 square meters by year-end.
