Billionaire Enrique Razon bags majority voting rights in Manila Water
MANILA, Philippines — Ports and casino tycoon Enrique Razon bagged a majority voting rights in embattled Manila Water Company Inc., the utility’s parent, Ayala Corp., said Thursday.
Earlier this week, Manila Water said Razon-led infrastructure company Prime Metroline Holdings Inc. bought 820 million common shares of the water firm at a price of P13 apiece. Ayala Corp. remains a shareholder with a 38.6% stake.
In a disclosure to the stock exchange, Ayala Corp. said the company’s executive committee gave Trident Water, the new company that Razon set up for its deal with Ayala, a 51% voting interest in Manila Water.
Philwater Holdings Company, a subsidiary of Ayala Corp., holds 65.95% of voting shares in Manila Water. Upon the grant of proxy rights to Trident Water, Ayala’s effective voting interest in Manila Water will stand at 31.6%.
“The shareholders’ agreement will become effective after the closing of the subscription agreement, which will occur after certain conditions are met, including required lenders’ consent and regulatory approvals,” Ayala Corp. said.
“This arrangement aims to strategically rationalize the economic and voting stakes between Ayala and Trident Water as strategic partners in Manila Water,” it added.
President Rodrigo Duterte has berated both Manila Water and Maynilad Water Services Inc. after a Singapore-based arbitration panel ordered the Philippine government to indemnify the two water providers for losses they suffered from an unenforced rate hike.
The president accused both companies of having government contracts with "onerous" provisions that are disadvantageous to the public and threatened to terminate their concession deals, sending their shares tumbling. The concessionaires have since dropped more than P10 billion in compensation claims from the government.
The Metropolitan Waterworks and Sewerage System, the Philippines’ water regulator, has rescinded the 15-year extension of the water concession deals, derailing the two utilities’ long-term plans.
Razon’s transaction with the Ayalas will infuse P10.7 billion in additional equity capital to Manila Water to support the company’s expansion plans and “growth initiatives.”
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