Egco sells East Water stake

Electricity Generating Plc (Egco), Thailand’s second-largest private power producer, has sold its entire 18.72% stake in Eastern Water Resources Development and Management Plc (EASTW) to Philippinesbased Manila Water Company Inc.

East Water, Thailand’s largest private water manager and distributor, is based in Bangkok but conducts most of its business in the eastern part of the country. Egco acquired the shares in 1997.

The two firms entered into a share purchase agreement for the totality of Egco’s stake yesterday. The deal is expected to be finalised by the first quarter of 2018, but the companies are still discussing the share price, said Egco president Jakgrich Pibulpairoj.

The proceeds generated from the deal will fuel Egco’s expansion, the executive said.

Manila Water is the exclusive provider of water and wastewater services to over 6 million residential, commercial and industrial customers in eastern metropolitan Manila.

SET-listed East Water is state-majority owned. Egco is the second-largest stakeholder after Provincial Waterworks Authority, a state enterprise responsible for the production and distribution of tap water outside Bangkok.

A stock analyst who requested anonymity said the deal will generate a relatively large amount of cash because East Water channels a considerable investment return to Egco each year.

Egco attempted to sell its stake in East Water and East Water subsidiary EGCOMP Tara Co in 2006, but the deal was scrapped.

EGCO shares on the SET closed yesterday at 239 baht, down two baht, in trade worth 646 million baht. EASTW shares closed yesterday at 12.5 baht, down 1.30 baht, in trade worth 390 million baht.