Conglomerate Ayala Corp. said Friday it is selling its remaining 23.6-percent stake in Manila Water Co. Inc. (MWC) to Trident Water Company Holdings Inc., a subsidiary of Prime Infrastructure Capital Inc., for P14.5 billion.
Ayala and its subsidiaries Michigan Holdings, Inc. and Philwater Holdings Company Inc. signed an agreement with Trident to sell 577.997 million MWC common shares and 872.487 million MWC preferred shares.
“The transactions are aligned with AC’s strategy to rationalize its portfolio and raise P50 billion in proceeds. The proceeds will be used to pare down debt and/or fund future investments,” Ayala said in a disclosure to the stock exchange.
The acquisition of Ayala’s remaining stake will result in Trident Water holding 81.9-percent voting stake and 62.2-percent economic interest in Manila Water, with the remainder to vest upon completion of payments.
Prime Infra said the acquisition of Ayala’s remaining stake in Manila Water underscores its commitment to strengthening the growth and expansion trajectory of the Philippines’ leading water utility firm.
“Manila Water continues to deliver reliable and efficient water and wastewater services to communities in key metros in the Philippines and abroad. We look forward to the company’s future as we continue optimizing the business and expanding both our domestic and international operations” said Prime Infra and Manila Water chairman Enrique Razon Jr.
Manila Water said it would continue to leverage Prime Infra’s expertise and track record in business development, project delivery, and operation of long-term assets in highly regulated industries and complex geographies.
Guillaume Lucci, president and chief executive of Prime Infra, said the move is in line with the intra-group synergy, as it continues to capture opportunities within its different business groups.
“The development solidifies Prime Infra’s market leadership in the water sector, driven not only by the performance and potential of Manila Water at home and abroad, but also by its synergy with our other majority-controlled bulk water subsidiary WawaJVCo Inc.,” he said.
WawaJVCo is operating phase 1 of the Wawa Bulk Water Supply Project, and developing the significantly larger Phase 2 Upper Wawa Dam capable of delivering 710 million liters per day (MLD) of raw water.
MWC common shares were priced at P22.361 per share based on a 30-day volume-weighted average price as of May 16,2024, less a 7.2-percent block discount. The preferred shares were priced on a negotiated basis at P1.844 apiece.
Ayala said the common shares would be paid through cash settlement, while the preferred shares would be paid in five installment payments of P1.6 billion spread from 2024 to 2029.
Ayala formed MWC in 1997 when it participated and won in the bidding for the water distribution in the east zone of Metro Manila.
Ayala partially divested from MWC with the sale of 25-percent interest to the Razon Group for P10.7 billion in 2020. Last year, Ayala sold another P5.7 billion worth of MWC shares to the Razon Group.
MWC provides water treatment, water distribution, sewerage, and sanitation services to more than seven million people in the eastern side of Metro Manila.
