Maynilad Water Services Inc., the concessionaire for the West Zone of Metro Manila, is planning to fund its P40 billion capital expenditures next year through a combination of debt instruments, bank loans, and internally generated funds.
In an interview, Maynilad President and Chief Executive Officer Ramoncito Fernandez said these options are all available to the company if its initial public offering does not push through or if it is conducted much later in 2025.
While the firm is ready to launch its initial public offering (IPO) as early as next year, after the mid-term elections, Fernandez said it will depend on the favorable market conditions and the valuation. Analysts say the firm could raise as much as $1 billion from the IPO.
Fernandez said that since their programmed capital expenditures next year will amount to P25 billion to P40 billion, they will need to raise funding of about P25 billion to P35 billion.
“We will have to study the most efficient way to raise funds next year because we still have borrowing capacity from the bilateral… We will have to go for the more efficient (or cheaper way to raise funds,” he said.
For this year, Fernandez said they have already raised all the funds they need with the recent completion of its maiden P15 billion blue bond offering.
“Our offering was met with overwhelming interest, resulting in an oversubscription. It is a testament to the confidence that the investing community has in Maynilad’s vision and the future we are building together,” he said.
This is the first peso-denominated fixed-rate Blue Bond registered with the Securities and Exchange Commission.
“The enthusiastic participation from institutional and retail investors attests to their confidence in Maynilad’s vision and in our commitment to sustainability. This successful start sets a promising precedent for our future fund-raising endeavors,” Fernandez added.
The proceeds from this blue bond issuance will finance massive capital expenditure projects focused on sustainable water and wastewater management.
“These projects are designed to improve our infrastructure, ensuring that we can continue to provide reliable and high-quality services to the communities we serve,” said Fernandez.
He also noted that, “This bond issuance lays the groundwork for our future IPO, showcasing our financial strength and our readiness to take on greater responsibilities in the public sphere.”
BPI Capital Corp. was the sole issue manager for the offering, in collaboration with BDO Capital & Investment Corp., First Metro Investment Corp., and East West Banking Corp. which serve as joint lead underwriters and joint bookrunners.
Maynilad provides water and wastewater services for the West Zone, encompassing 17 cities and municipalities, including Caloocan, Malabon, Navotas, Valenzuela, parts of Quezon City and Manila, parts of Makati, Pasay, Parañaque, Las Piñas, and Muntinlupa, as well as the cities of Cavite, Bacoor, and Imus, and the municipalities of Kawit, Rosario, and Noveleta.