The Philippine Stock Exchange said businessman Enrique Razon’s acquisition of controlling interest in Manila Water is covered by the local bourse’s backdoor listing rules.
It said trading of Manila Water shares was suspended, pending the submission of a comprehensive disclosure of the transaction.
Manila Water agreed in February 2020 to sell 820 million common shares in the water utility firm to the Razon group at P13 per share.
The 820 million common shares represent 24.96-percent economic rights in Manila Water and 11.91 percent of the total number of outstanding voting shares of stock of Manila Water.
Ayala Corp. through unit Philwater Holdings Company Inc. said Wednesday it agreed to sell 2.691 billion preferred shares in Manila Water to Razon’s Trident Water Company Holdings Inc. worth P4.84 billion.
The purchase of the preferred shares represents a 39.09-percent voting stake and 8.19-percent economiciinterest in Manila Water.
It said that once the transactions were completed, Trident Water would have 51-percent voting rights and 33.16-percent economic interest in Manila Water.
Ayala Corp. and Philwater will have voting interest of 31.6 percent and economic interest of 30.37 percent.
The PSE said these transactions would result in a substantial change in the voting structure of MWC upon the completion of the transactions.
Manila Water clarified that it had not yet issued the 820 million shares to Trident Water. It said the transaction would be subject to finalization of terms and conditions of the agreement, and compliance with and completion of the mandatory tender offer as may be required by the Securities and Exchange Commission.
Manila Water is the water concession for the east zone of Metro Manila.
The entry of Razon in Manila Water followed President Rodrigo Duterte’s criticisms against water concessionaires in Metro Manila because of alleged “onerous” concession agreement with the state-owned Metropolitan Waterworks and Sewerage System.
The share price of Manila Water closed at P15.98 on Feb.15.