Engineering firm Megawide Construction Corp. and Araneta Group sought arbitration over several real estate projects that were affected by the COVID-19 pandemic.
Megawide said in a disclosure to the stock exchange Araneta Center Inc. filed with the Construction Industry Arbitration Commission a counterclaim against the company amounting to P1.53 billion.
The counterclaim stems from the alleged violations relative to the P4.5-billion construction contract for the expansion of Gateway Mall 2 and Ibis Hotel within the Araneta Center in Cubao, Quezon City.
Gateway Mall 2 is a seven-story mall development, while Ibis is a 15-story project offering 300 hotel keys. Both projects were topped off in the early part of 2020.
Megawide said it planned to file an opposition to ACI’s permissive counterclaims for due consideration by the CIAC Arbitration panel.
“The permissive counterclaims will not have a significant impact as far as the operations of the company is concerned,” Megawide said.
Megawide in January also filed a complaint with CIAC involving the design and construction of the Araneta Cyberpark Tower 2.
Megawide’s aggregate claim against ACI amounts to P339.6 million.
The prolonged pandemic has affected several infrastructure and construction projects in the country because of mobility restrictions, supply problems and increase in cost of materials.
Megawide also built Cyberpark 1 and the New Frontier theatre for ACI.
ACI is the developer of the 35-hectare Araneta Center—a mix-use hub of retail, entertainment, residential, business and hotel developments in Quezon City.
Megawide on Monday concluded its follow-on offering with the listing of its Series 5 preferred shares at the Philippine Stock Exchange.
Megawide said it would use the proceeds to partially fund the full redemption of its Series 2A preferred shares that were listed in November 2020.
Megawide’s portfolio of projects includes the Metro Manila Subway System, Suncity West Side City project, Newport Link project and Malolos-Clark Railway Phase 1 project.
It also took the next step in realizing its goal of entering the data center space—a burgeoning industry amid heightened digitalization—with the signing a few weeks ago of an agreement with Singapore-based Evolution Data Centers to build a facility handling critical servers.
The share price of Megawide climbed 0.34 percent Tuesday to close at P2.99.