Metro Pacific Investments Corp. is in talks with a Bangkok-based water company to sell a 10-percent stake in water utility unit Maynilad Water Services Inc. for P12 billion, sources said Monday.
Several informed sources confirmed that Metro Pacific was in talks with a water company based in Thailand.
Sources said while the Thai firm already completed due diligence on Maynilad, it was still securing the necessary approval for the planned investment.
An executive of Metro Pacific expressed hope that the planned investment would be approved soon, after Maynilad secured a favorable ruling on its arbitration case against the government.
“We are not subjecting them, the parties we are talking to, to a strict timetable because we know that in dealing with foreign investors, negotiations take time,” a top official of Metro Pacific said.
“But with the favorable arbitration ruling, that would speed things up,” the executive said.
A three-man arbitral tribunal last month unanimously upheld Maynilad’s claim against the Philippine government and ordered the state to pay P3.42 billion for delayed tariff increases from March 11, 2015 to Aug. 31, 2016.
Meanwhile, the sale of additional stake in Maynilad will reduce Metro Pacific’s effective ownership in the water utility firm to 42.8 percent from 52.8 percent. Metro Pacific would remain the single biggest shareholder of Maynilad.
Metro Pacific plans to use the proceeds from the transaction to finance big-ticket infrastructure projects.
Other shareholders in Maynilad are Japanese conglomerate Marubeni Corp. with a 20-percent stake, and DMCI Holdings with 16 percent.
Maynilad is the private water concessionaire for the west zone of Metro Manila which covers the cities of Manila, Quezon City, Makati, Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas and Malabon in Metro Manila; the cities of Cavite, Bacoor and Imus and the towns of Kawit, Noveleta and Rosario in Cavite province.
Maynilad signed a memorandum of understanding with Metropolitan Waterworks Authority of Thailand in 2014 for an exchange program that will have both parties sharing resources, skills and expertise to develop their personnel.
MWA is the state enterprise responsible for water services in Bangkok, Nonthaburi province and Samuntparkarn province in Thailand.