Ports and casino tycoon Enrique Razon Jr. is acquiring a 25 percent stake in Manila Water Co Inc., the embattled utility company owned by the Ayala Group, for P10.7 billion.
Manila Water said in a disclosure to the stock exchange Monday Prime Metroline Holdings Inc. of Razon was buying 820 million common shares of the utility firm at P13 per share.
The Ayala Group will remain a major shareholder of Manila Water with a 38.6 percent-stake from the previous 40.9 percent
The water utility firm said the entry of Razon as a strategic investor was expected to bolster the company’s ability to provide reliable, efficient and sustainable water and wastewater services in the East Zone and at the same time pursue growth initiatives both domestically and globally.
It is also expected to strengthen the company’s balance sheet and allow it to be more agile in pursuing long-term strategic initiatives.
“Our partnership with the Razon group will result in clear synergies to achieve Manila Water’s long-term goal of providing sustainable water and wastewater services to our customers in the East Zone of Metro Manila and in the other markets we serve,” said Manila Water chairman Fernando Zobel de Ayala.
“Our partnership combines our respective technical and management expertise. Looking beyond our domestic businesses, the extensive global experience of Mr. Razon through his port operations opens more opportunities for Manila Water to serve new markets,” he added.
This is the second partnership between Razon and Manila Water. WawaJVCo, a joint venture between Razon’s Prime Infra and businessman Oscar Violago’s San Lorenzo Ruiz Builders Group, earlier signed an agreement with Manila Water to develop the Wawa bulk water supply project.
The bulk water supply project is expected to start providing an additional 80 million liters per day of water to Metro Manila by the end of 2021.
“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,” said Prime Infra chairman and chief executive Razon
Ayala chairman and chief executive Augusto Zobel de Ayala said the partnership with Razon group demonstrated the conglomerate’s ability to attract sizeable and long-term investments into the business group.
“Across all our partnerships, Ayala values the complementary strengths and expertise that we can leverage off a team-based approach, which has been a hallmark of our many joint undertakings with both local and international groups. Both Ayala and Mr. Razon share a deep commitment to contributing to the country’s water infrastructure development,” he said.
“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.
Manila Water on Friday said its board of directors approved the increase in the company’s authorized capital stock to P4.4 billion;.
Manila Water over the past decade has been establishing itself as a major water infrastructure player in Southeast Asia with investments in several platforms across Vietnam, Thailand, and Indonesia. It is constantly on the lookout for opportunities in the region.