The Ayala-controlled Manila Water Co. (MWC) has agreed to raise at least P9 billion from the sale of shares in a plan agreed during a special board meeting Friday. However, MWC did not announce who would buy the shares.
The surprise move, which was reached after MWC announced a suspension of trading from January 31 to February 3, has sparked frenzied speculation that the Ayalas were ready to take in new partners in MWC amid President Rodrigo Duterte’s review of its East concession contract with Metropolitan Waterworks and Sewerage System.
While MWC did not give further details on the sale of the shares, market pundits are betting that a new partner would come in to take in at least 20 percent and be its joint venture partner in MWC which could have a new contract or franchise if negotiations with the Duterte administration pan out.
Some pundits believe that either Ricky Razon or a Chinese state owned enterprise or a combination of both could end up as the Ayalas’ partner in MWC.
Razon’s Prime Metroline Infrastructure Holdings Inc. (PMHI) is MWC’s partner for an 80-meter dam in Montalban to ensure sufficient water supply in the East Zone area
Other pundits believe that the Aboitiz Group, and Manny Villar of Prime Wate were also in play for the water franchise holder. The price and number of Manila Water shares in the anticipated sale could still change depending on negotiations with the new partner.
In its special board meeting, the Manila Water board agreed to increase its authorized capital stock from P3.1 billion common shares to P4 billion.
The amendments include the tripling of its “carved-out” shares” from 300 million unissued common shares to 900 unissued million common shares.
The board also agreed to sell the new common shares for at least P10 each.
The board also agreed to accept cash payment for the sale of the carved out shares aside from only properties or assets previously. These amendments will be presented for approval during Manila Water’s annual stockholders’ meeting on April 17, 2020.