By James A. Loyola
Ayala Corporation has executed and agreement ceding control over Manila Water Company (MWC) to new strategic partner Enrique K. Razon Jr.
In a disclosure to the Philippine Stock Exchange, Ayala said this is in relation to the acquisition of a 25 percent stake in Manila Water by Razon’s Prime Metroline Holdings, Inc., through Trident Water that it will incorporate for the transaction.
“Please be informed that as part of the shareholder agreement to be executed among Ayala Corporation, Ayala’s wholly owned subsidiary Philwater Holdings Company (Philwater), and Trident Water, Ayala’s Executive Committee has approved the grant of proxy rights by Philwater to Trident Water over such number of preferred shares to enable the latter to achieve 51 percent voting interest in Manila Water,” Ayala said.
Philwater owns four billion of preferred shares in Manila Water, representing 65.95 percent of voting shares in the Company. Upon the grant of proxy rights to Trident Water, Ayala’s effective voting interest in Manila Water will be whittled down to 31.6 percent.
The shareholders’ agreement will become effective after the closing of the subscription agreement, which will occur after certain conditions are met, including required lenders’ consent and regulatory approvals.
“This arrangement aims to strategically rationalize the economic and voting stakes between Ayala and Trident Water as strategic partners in Manila Water,” said Ayala.
Prime Metroline had acquired 820 million MWC common shares at ₱13 per share or a total of ₱1066 billion.
“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.”
Manila Water Chairman Fernando Zobel de Ayala said that, “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.