Manila Water unit raises stake in Vietnam firm

A UNIT of Manila Water Co., Inc. is increasing its stake in a listed firm in Ho Chi Minh City that aims to become Vietnam’s first fully integrated water and wastewater infrastructure provider, it said on Monday.

The Ayala- led water concessionaire on Monday said its Singapore subsidiary Manila Water South Asia Holdings Pte. Ltd. had signed an investment agreement with Saigon Water Infrastructure Co., Inc. for the purchase of 6.146 million primary shares.

The deal will allow the unit to own a total of 37.99% of the outstanding capital stock of Saigon Water, a holding company in Vietnam that is listed in the Ho Chi Minh City Stock Exchange.

Manila Water did not disclose the value of the acquisition but the 31.47% Saigon Water stake it bought in October 2013 was valued at P642.76 million. It had said that the previous subscription transaction gave it “significant influence” in Saigon Water.

Under the new agreement, the Manila Water unit will pay the subscription price after compliance by Saigon Water with all the precedent conditions unless these are waived by Manila Water South Asia itself.

In its disclosure, Manila Water said it would provide the exchange with all the necessary information about the transaction once the acquisition is completed. Saigon Water is described as aiming to become “the first fully integrated company in the Vietnam water and wastewater infrastructure sector, through the construction of water and wastewater treatment plants and the provision of engineering, operation and management services and other similar activities.”

Saigon Water’s existing investments include Tan Hiep 2, a bulk water company providing 300 million liters per day to the government- owned water utility serving Hoc Mon, a suburban district of Ho Chi Minh City. It also has interests in Cu Chi Water, which distributes water to the Cu Chi district in Ho Chi Minh City with around 75,000 water service connections.

Outside of Ho Chi Minh, Vietnam’s southern city commonly known as Saigon, the holding firm has investments in the province of Gia Lai, through a bulk water company that provides 20 million liters per day, and a water distribution company in the province of Lam Dong.

Manila Water is the single largest shareholder in two bulk water suppliers in Ho Chi Minh City, namely: Thu Duc Water BOO Corp. and Kenh Dong Water Supply Joint Stock Co.

On Tuesday, shares in Manila Water closed 0.93% higher at P32.40 each.