Philippines' Manila Water sells $286m minority stake to port tycoon

[MANILA] Philippine utility firm Manila Water Co Inc said on Monday it is selling a minority stake worth 10.66 billion pesos (S$285.6 million) to a port magnate and dam builder.

Manila Water, which serves around six million customers in the capital and nearby provinces, has agreed to sell 820 million common shares, or a 25 per cent stake, for 13 pesos apiece to Prime Metroline Holdings Corp, owned by port tycoon Enrique Razon.

The water distributor last week raised its authorised capital stock, allowing it to sell as much as 900 million shares to fund the expansion.

The per-share deal value represents a 6.9 per cent premium to the stock's closing price of 12.16 pesos each on Thursday. Trading of Manila Water's shares were voluntarily halted on Friday.

The sale comes as concession deals between the government and utility firms Manila Water and Maynilad Water Services Inc are being questioned and reviewed by President Rodrigo Duterte. He called the 25-year concession contracts signed in 1997 "onerous and disadvantageous" for ratepayers.

"Any new investor is welcome for Manila Water especially because of foregone rate increases and arbitration award. The risk is spread," said Astro del Castillo, managing director at First Grade Finance in Manila.

Manila Water lost as much as US$550 million, or nearly three-fourths, of its market value since President Duterte lashed out at water concessionaires in December. The company then pledged not to seek higher rates and a forego of a 7.4 billion pesos arbitration award.

Prime Metroline holds government approvals for a bulk water supply project near the capital.

REUTERS