TOKYO, Japan - Marubeni Corporation, one of Japan’s largest diversified trading conglomerates or sogo shosha, remains committed to Maynilad Water Services Inc. and will not exit from the company when it undertakes its planned $1-billion initial public offering (IPO).

This assurance was made by Kazuaki Shibuya, Marubeni’s Environmental Infrastructure Department General Manager and representative to the Maynilad Board of Directors, during a press briefing at the Japanese giant’s headquarters.

He stressed that Marubeni will continue to hold on to its stake in Maynilad even after the water utility’s planned IPO targeted for sometime in 2026 as mandated by its concession agreement with the government.

Marubeni currently owns 20 percent of Maynilad’s outstanding capital although this may be diluted or reduced if the utility decides to sell new common shares for its planned IPO.

Maynilad President and CEO Ramoncito Fernandez said, “we are excited about the IPO because a public utility that is very important to the lives of Metro Manila residents will be listed with 30 percent of Maynilad available for the public to invest in.”

Noting that it will be a “significant IPO,” he said that plans include Maynilad first acquiring or absorbing Metro Pacific Water, the bulk water subsidiary of MPIC, prior to the IPO because the two businesses are related.

Fernandez said Maynilad intends to invest P163 billion for capital expenditures or capex over the next five years with about P22 billion to P26 billion to be spent this year and about P31 billion in 2024.

“We have enough leverage to fund the capex for the next three years since our balance sheet can absorb additional debt. That’s why we have been tapping the debt market for the last two to three years and we will continue to tap the debt market.

“But, moving forward, at a certain point, we will need the IPO to continue growing and continue investing for our growth,” he explained.

Fernandez said the five-year capex of P163 billion will be used mainly to reduce non-revenue water percentage to the world standard of 25 percent by 2027. It expects to end 2023 with an NRW level of 42 percent.

It will also aim for 95.1 percent 24-hour water availability at a pressure of seven pounds per square inch with the 2023 target at 88.3 percent.

The firm will also increase sewer coverage by 16.6 percent to 33 percent with the target at 21 percent for the end of 2023.