Megawide Construction Corp. said Friday the joint venture that operates Mactan Cebu International Airport restructured P23.9-billion worth of debt as the pandemic wreaked havoc on the travel industry.
Megaworld said in a disclosure to the stock exchange Friday GMR Megawide Cebu Airports Corp. signed an agreement with lenders to rebalance debt servicing commitments and relax debt covenants related to the financing to develop, operate and maintain the multi-awarded Mactan-Cebu International Airport.
GMCAC lenders are composed of BDO Unibank Inc., Philippine National Bank, Bank of the Philippine Islands, Development Bank of the Philippines, Land Bank of the Philippines, Metropolitan Bank and Trust Company and the Asian Development Bank. BDO Capital acted as the financial advisor to the transaction.
“We are glad that the negotiations with our lenders were finalized and we express our sincerest gratitude to our financial partners, who from the very start of this pandemic have been very supportive. The agreement is a strong sign of support and confidence in Megawide’s airport business model. The more relaxed debt servicing schedule will provide our airport operations a clearer runway to full recovery once the situation normalizes,” said Megawide chairman and chief executive Edgar Saavedra.
Megawide said the final terms of agreement executed by both parties would temporarily free up around P3.6 billion in cash from 2021 to 2023 and reinforce GMCAC’s financial position, which could be utilized to support operations while the ongoing pandemic limits air travels.
Principal payments will be postponed to 2027 to 2029, based on the renewed omnibus loan and security agreement when the travel industry is expected to have fully recuperated from the ill effects of COVID-19.
“From the very start, our lenders were very accommodating and have been observing the true spirit of Bayanihan. They have genuinely exercised their sworn mandate to act as intermediaries between sources and users of capital, as they have collectively consented to our requests on all occasions,” said Megawide chief financial officer Ramon Diaz.
“We are very grateful that our lenders actually initiated further discussions to resolve all the issues and settle for a more extensive and mutually-beneficial scheme for all parties,” Diaz said.
Megawide reported an attributable net loss of P389 million in 2020, a 145 percent reversal from an attributable net income of P859.5 million in 2019 because of losses on airport operations.
Airport operations at Mactan Cebu International Airport delivered revenues of P1.11 billion last year.