PORTS and casino tycoon Enrique K. Razon Jr. is acquiring a 25-percent stake in Manila Water Co. Inc. for P10.7 billion, pushing the company forward with fresh funds and additional water supply amid verbal attacks by President Rodrigo Duterte.
In a statement issued Monday, February 3, 2020, Ayala Corporation said the Razon-Led infrastructure company Prime Metroline Holdings Inc. will join Manila Water as a “strategic investor” through Trident Water, a company that it will incorporate for the transaction.
Ayala said it will remain a shareholder with a 38.6 percent stake.
The ₱10.7 billion fresh funds that Razon will be bringing in will support Manila Water’s capital spending program to improve the water and wastewater distribution system in Metro Manila’s east zone concession.
The announcement of a new investor was made after Manila Water sought to voluntarily suspend trading of its shares on Friday, January 31, because of “material events that could reasonably be expected to occur from today until prior to the start of trading on Monday, February 3, 2020.”
Also on Friday, Manila Water’s board increased the company’s authorized capital stock by about 26 percent to P4.4 billion from P3.5 billion.
Ayala said this new partnership with the Razon Group demonstrates its ability to attract sizeable and long-term investments into the business group, adding enormous value to Manila Water as it executes on its long-term strategic direction.
“Together, both our groups can provide a unique, holistic, and long-term solution to providing predictable and dependable long-term supply to the growing needs of the east zone concession and likewise contribute to strengthening the infrastructure required to deliver an important resource to preserve the city’s livability and health at a time of growth and expansion in the metropolis,” Ayala’s chairman and CEO Jaime Augusto Zobel de Ayala said.
“We expect this partnership to likewise help accelerate Manila Water’s regional aspirations given Mr. Razon’s solid experience in penetrating overseas markets,” Ayala president and COO Fernando Zobel de Ayala stated.
For his part, Razon said they were excited to enter into a partnership with the Ayala Group.
“We are excited to enter into this partnership with the Ayala group.
“We will dedicate our efforts to further develop this unique business both here in the Philippines and abroad. We are confident that our collective experience, technical capabilities, and corporate synergies will be of great benefit to Manila Water, the people it serves, and its other stakeholders,” Razon said.
The Bulk Water Supply Project of the Razon-led Wawa JVCo Inc. is expected to start supplying an additional 80 MLD of water to Metro Manila by the end of 2021.
Manila Water is the sole provider of water and wastewater services to more than six million people in the east zone of Metro Manila.
Manila Water and Pangilinan-led west zone concessionaire Maynilad Water Services Inc. have been the subject of Duterte’s verbal attacks since December 2019, when a Singapore tribunal ordered the government to pay a total of P10.7 billion as indemnification for lost revenue due to a rate hike that was not implemented.
Manila Water was supposed to receive P7.4 billion while Maynilad was to get P3.4 billion.
Instead of ordering government to pay up, Duterte moved to cancel the extension of their contracts with the Metropolitan Waterworks and Sewerage System. (MVI/SunStar Philippines)