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Friday, March 29, 2024

MPIC plans to cut Maynilad stake

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Infrastructure conglomerate Metro Pacific Investments Corp. plans to reduce its stake in water unit Maynilad Water Services Inc. to raise funds for toll road projects, an executive said over the weekend.

Maynilad president Ramoncito Fernandez said Metro Pacific was in talks with potential investors for a possible selldown on Maynilad.

Fernandez said while the deal could result in Metro Pacific owning less than a 51-percent stake in the water utility firm, the conglomerate would still remain the single biggest shareholder of Maynilad.

“There are on going discussions but will all depend other side [potential investor] on how eager they are and how quick their decision process will be. But our hope is within this year,” Fernandez said.

Metro Pacific currently owns a 52.8-precent stake in Maynilad, while Japanese trading firm Marubeni Corp. and Consunji-led DMCI Holdings Inc. own 20 percent and 16 percent, respectively.

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Fernandez said the selldown would likely happen this year, regardless of the results of the arbitration case filed by the water utility firm against the Philippine government.

“We already have a valuation target in our mind whether we win or not,” Fernandez said.

Fernandez did not comment when asked if Metro Pacific was in talks with Marubeni for the planned selldown.

“I cannot comment, but there are other parties who want to look at this opportunity,” Fernandez said.

Fernandez said as an existing shareholder, Marubeni would have a right of first refusal on the planned selldown.

Marubeni bought into Maynilad for around $400 million in 2013. It purchased 21.54 percent in DMCI-MPIC Water Co., the joint venture holding company which held 92.85 percent of the shares in Maynilad.  

This translated into a fifth of the economic interest in Maynilad, which is the water concessionaire for the west zone of Metro Manila which covered the cities of Manila, Quezon City, Makati, Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas and Malabon all in Metro Manila; the cities of Cavite, Bacoor and Imus and the towns of Kawit, Noveleta and Rosario, all in Cavite province. 

Metro Pacific earmarked P79 billion in capital expenditures this year, significantly higher than P40.5 billion in 2016, primarily to fund toll roads, power projects and water projects of its units.

Metro Pacific chief finance officer David Nicol said the conglomerate planned to fund this year’s capital spending program via bank borrowings and sale of assets.

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