Shareholders of Manila Water Co. Inc. on Friday approved an increase in the company’s capital stock to P4.4 billion from P3.5 billion, paving the way for the entry of businessman Enrique Razon Jr. into the company as a strategic investor.
Shareholders also voted to raise the carved-out shares from the increase in the company’s capital stock from 300 million to 900 million unissued common shares and allow the issuance of the carved-out shares.
Manila Water chairman Fernando Zobel de Ayala said during the annual stockholders’ meeting held via livestream the higher capital stock and the increase in the carved out shares were just one of the other conditions being worked out by both parties.
Razon’s group through unit Trident Water is poised to acquire a controlling stake in Manila Water while Ayala group’s ownership in the utility firm will drop to 31.6 percent based on the share purchase agreement signed by both parties in February.
Under the agreement, Razon will acquire 820 million Manila Water shares at P13 apiece, or equivalent to a 25-percent stake.
Razon also received proxy rights by Philwater Holdings Co. of Ayala Corp., giving him a 51-percent voting interest in the water concessionaire after the transaction.
Razon plans to make a tender offer to acquire more shares held by other investors in Manila Water.
Zobel said the completion of the revised water concession agreement with the government would bring more stability into the company.
“Bringing in a strategic investor will be helpful to the company but the completion of the negotiations with the government on our concession agreement will provide a great deal of stability and make our banks more comfortable. That (negotiations) is proceeding well and we hope to get the results very soon,” Zobel said.
The country’s Metro Manila water concessionaires are in the midst of renegotiating an agreement with the government after President Rodrigo Duterte cited alleged “onerous provisions” in the previous deals.
Share price of Manila Water on Friday rose 0.2 percent to P11.08.