DMCI Holdings plans $50-M share issue for Maynilad proj

DMCI Holdings Inc., the listed holding firm of the Consunji family, plans to issue $50 million worth of shares to raise necessary funds to support the acquisition of Maynilad Water Services Inc.

In a disclosure to the Philippine Stock Exchange yesterday, DMCI said it has appointed Macquarie Securities as financial adviser to determine options available for the company to boost the liquidity of its shares and to raise funds.

"This may involve the placement and/or issuance of primary shares in the corporation worth approximately $50 million," DMCI said.

DMCI, however, said nothing has been finalized yet.

DMCI shares closed 20 centavos lower at P6.90 each yesterday.

The DMCI group, in tandem with Metro Pacific Investments Corp., recently won the auction for the government’s 83.97-percent stake in Maynilad with its bid of $477.23 million, topping the Ayala-led consortium’s bid of $399.99 million.

Maynilad provides water supply in the western part of Metro Manila which covers about six million customers in Manila, Makati, Quezon City and the whole of Malabon, Navotas, Muntinlupa, Caloocan, Pasay, Parañaque, Las Piñas, Valenzuela and several towns in Cavite.

DMCI-MPIC has committed to pay a total of $503.9 million for the 83.97-percent stake, comprised of a minimum cash bid of $56.7 million and a financial supplement of $447.2 million.

Aside from Maynilad, DMCI was also chosen by the National Power Corp. (Napocor) to provide power generation in the off grid area in Masbate. This project will be managed and carried out through wholly-owned subsidiary DMCI Energy Resources Unlimited Inc.

DMCI owns about 63 percent of Semirara Mining Corp., the country’s largest producer of coal. Semirara sells the bulk of its coal to state-owned Napocor.

DMCI was also one of the two bidders for Napocor’s 600-megawatt Calaca coal-fired power plant in Batangas. The bidding, held last May, was declared a failure because the offers were below the government’s reserve price.

In the nine months ending September 2006, however, DMCI’s net profit fell 60 percent to P1.03 billion from P2.57 billion a year earlier due to the lack of extraordinary gains and higher costs and income taxes.

The 2005 nine-month net profit included a one-time gain from the sale of shares in coal unit Semirara amounting to P2 billion.