Philippines’ Manila Water sells minority stake to port tycoon for $210m

Visual from Manila Water's website

Philippines-listed water and wastewater services provider Manila Water Company Inc (Manila Water) is selling a 25 per cent stake to Prime Metroline Holdings, the infrastructure company of port tycoon Enrique Razon Jr., for 10.7 billion pesos ($210 million), according to a disclosure Monday.

The transaction comes after President Rodrigo Duterte lashed out at Manila Water over supposed “onerous” provisions in its government contracts and gave the company the option to accept government-crafted deals or be taken over.

In a statement, Ayala-led Manila Water said it has signed a subscription agreement with Prime Metroline for the acquisition of 820 million common shares at 13 pesos per share. The per-share deal value represents an about 7 pesos premium to the stock’s closing price of 12.16 pesos on Thursday.

Ayala Corporation remains a shareholder in Manila Water with a 38.6 per cent stake.

Manila Water said the fresh funds will support its capital spending program to improve the water and wastewater distribution system in Metro Manila east zone concession, comprising a broad range of residential, commercial and industrial customers.

Manila Water said its partnership with Trident Water “adds enormous value” to the company as it executes on its long-term strategic direction.

Philippine billionaire Razon is the chairman of port operator International Container Terminal Services Inc. He is a major shareholder Trident Water, a venture that seeks to develop a new water source for the Philippine capital.

“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 and Manila Water Board Chairman Fernando Zobel de Ayala said.

Over the past decade, Manila Water has been establishing itself as a major water infrastructure player in Southeast Asia with investments in various platforms across Vietnam, Thailand, and Indonesia and is constantly on the lookout for opportunities in the region.

In 2018, the water services provider acquired an 18.72-per cent stake in Eastern Water Resources Development and Management Public Company Ltd, a publicly listed water supply and distribution company in Thailand.

Manila Water is also the largest direct foreign investor in Vietnam’s water sector after foraying into the country’s bulk water and concession projects. It has also completed pilot projects in Bandung, Indonesia for a non-revenue water reduction program, and in Yangon, Myanmar for leakage reduction.

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.