By JAMES A. LOYOLA
The Ayala group has taken tycoon Enrique K. Razon Jr. as a partner in its beleaguered subsidiary Manila Water Company (MWC) through a strategic ₱10.66-billion subscription of new shares equivalent to a 25 percent stake.
In a disclosure to the Philippine Stock Exchange, Ayala said it remains a shareholder of MWC with a stake that is diluted to 38.6 percent.
MWC said Razon’s Prime Metroline Holdings, Inc., on behalf of a company called Trident water which will be incorporated, signed a Subscription Agreement for the acquisition of 820 million MWC common shares of Manila Water at ₱13 per share.
“The entry of Prime… as a strategic investor to Manila Water is expected to bolster Manila Water’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,” MWC said.
It added that, “The Razon group brings with it its expansive global reach and business expertise; with operations in Asia Pacific, Latin America, Middle East and Africa, to Manila Water.”
The ₱10.66-billion additional equity capital is expected to strengthen the Company’s balance sheet and allow it to be more agile to pursue its long-term strategic initiatives.
Ayala said this will support MWC’s capital spending program to improve the water and wastewater distribution system in Metro Manila’s east zone concession.
“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.
He added that, “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.”
“We expect this partnership to likewise help accelerate Manila Water’s regional aspirations given Mr. Razon’s solid experience in penetrating overseas markets,” Zobel noted.
He said “Mr. Razon’s successful global operations in economies around Asia Pacific, Latin America, Middle East, and Africa is a testament to his strong ability to establish business leadership overseas and navigate the nuances and challenges that come with operating in new territories, including differences in culture, social structures, and economic development.”
“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 Razon.
Ayal said itspartnership with Trident Water, which demonstrates Ayala’s ability to attract sizeable and long-term investments into the business group, adds enormous value to Manila Water as it executes on its long-term strategic direction.
“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,” Ayala Chairman and CEO Jaime Augusto Zobel de Ayala said.