Court okays Maynilad’s rehabilitation exit plan

Maynilad Water Services Inc., the concessionaire for the water and sewerage system in Mega Manila’s West Zone, has received the Quezon City Regional Trial Court’s nod for its plan to exit from rehabilitation.

Maynilad is controlled by the Consunji family’s DMCI Holdings Inc. and Metro Pacific Investments Corp., the local flagship of the First Pacific Co. Ltd. of Hong Kong. The consortium took over Maynilad’s operations in 2006.

In its ruling, the court approved for implementation the prepayment and settlement agreement (PSA) and declared that Maynilad has successfully implemented the 2005 rehabilitation plan.

The PSA specifies the terms on Maynilad’s settlement of all Metropolitan Waterworks and Sewerage System (MWSS) and foreign loans, most of which have payment terms up to 2013 originally, as a requirement to bring the company out of the debt and capital restructuring agreement (DCRA).

With the restrictions of the DCRA lifted, Maynilad now has more flexibility in the handling of finances that will fund water improvement projects throughout the West Zone concession. The company had set a capital expenditure program of P8 billion this year.

The Quezon City RTC also ordered the rehabilitation receiver to submit a final report and accounting of Maynilad within 60 days of receipt of the order.

The DMCI-MPIC consortium earlier said it planned to infuse $60 million in fresh capital into Maynilad to be used to finance the utility firm’s expansion projects.

Of the equity infusion, $20 million will come from DMCI Holdings Inc., while the remaining $40 million will come from the tandem of MPIC parent firm First Pacific Co. Ltd. and Ashmore Funds.

After the infusion, DMCI is expected to retain 41.2 percent of DMCI-Metro Pacific. MPIC will end up with 31 percent while First Pacific and Ashmore will control 20.6 percent of Maynilad.

Germany’sDeutsche Bank and Singaporean financing firm Noonday Asset Management Group, on the other hand, will end up with 7.2 percent.

Currently, Maynilad has a total of 677,985 billed water services, equivalent to a population of around 6.2 million in the West Zone which covers nine cities and two municipalities in Metro Manila and one city and five towns in the Cavite province.