Maynilad to hold annual stockholders’ meeting

The Maynilad Water Services Inc. (Maynilad) is scheduled to hold an annual stockholders meeting for the first time since it was taken over by the government as the company prepares for its privatization by June this year.

Set on January 9, finance officials said the stockholders meeting will pave the way for the constitution of the company’s board of directors with representatives nominated by the Metropolitan Waterworks and Sewerage System (MWSS).

Finance Undersecretary Jay Singson Jr. told reporters that the election of MWSS representatives into the Maynilad board would allow the selection of a financial advisor, the first step towards the ultimate sale of government’s interests in Maynilad.

According to Singson, the same group of investors are still interested in Maynilad, eagerly awaiting the process that would allow the company to hire the financial adviser and set the public auction for government’s shares.

Before the government take-over, Maynilad was 60 percent controlled by the Lopez-owned Benpres Holdings and the remainder was held by Ondeo Waters, an affiliate of Suez Lyonnaise des Eaux.

When Benpres returned the concession to the government, the MWSS ended up with a 30 percent interest in the consortium following a $20-million debt-for-equity swap.

Later, the government bought out part of the shares held by Ondeo which wanted to reduce its exposure in Maynilad after the debt restructuring came into effect.

Singson said the government was determined to resell its interests in Maynilad and keep it a private company. "We have no interest in keeping Maynilad," he said. "The target is to complete the privatization by June this year."

Maynilad has attracted significant interest from various business groups, particularly a consortium headed by the Ayala-controlled Manila Water Co. Inc. and the ING Group.

The Ayala-led group formally signified interest in taking over debt-saddled water utility and if it succeeds, the Ayala Group would get a monopoly over Metro Manila’s water service.

Manila Water operates the east zone concession which along with the west zone concession was privatized in 1997.

Construction giant DMCI Holdings Inc. has also signified interest in taking over Maynilad, saying that it is willing to acquire all Maynilad shares if possible.

Maynilad itself is optimistic over its 2006 prospects and management said it is expecting to surpass its P1.9-billion net income target for 2005.