Manila Water plans IPO in late 2004 or early 2005

The Ayala-led Manila Water Co. Inc. (MWC) plans to go public in late 2004 or early 2005, top officials of the company said yesterday.

In an interview yesterday, MWC president Antonino T. Aquino said the water distribution company is seriously looking at going public within the next two years. In fact, the company is now negotiating with a prospective financial advisor for the public offer.

"The Bank of the Philippine Islands (BPI) is a part owner of Manila Water, so somehow we expect that they would be involved in the process of public offering," Aquino said.

MWC services the east zone of Metro Manila while Maynilad Water Services Inc. holds the west concession.

MWC has two billion in common shares nearly all of which have been issued. The company will thus have to apply for or issue additional shares for the pubic offering.

Officials said they had wanted to launch a process of the public offering earlier but the capital market remained sluggish especially with the anxiety then over the war in Iraq.

"But it is starting to look good with the eventual conclusion of the war, and that is a positive sign for our offering," Aquino added.

MWC chief financial officer and treasurer Sherisa P. Nuesa, meanwhile, reported that the company net income jumped over 214 percent to P553 million last year, from P176 million in 2001.

Aquino said the gains came from an increase in customer base, improved collections and prudent cost management.

From 2.8 million in 1997, MWC’s customer base grew to 4.3 million by end 2002.

This year, the company has earmarked a capital expenditure program worth P2 billion escalating to P2.5 billion next year, and to P2.5-P2.8 billion in 2005.

"It should reach a total P15 billion within the next 10 years," Nuesa said.

Meanwhile, Aquino denied rumors that Manila Water is looking at acquiring a stake in troubled Maynilad Water Services.

"We are not interested in making investments. It is an issue that the members of that consortium should first address, and we do not want to disrupt the system," the MWC chief executive said.