Business World

H20 spins off water business

- By Arra B. Francia Reporter

PHILIPPINE H2O Ventures Corp. (H2O) is spinning off its water assets as it prepares for a takeover by Davao-based businessma­n Dennis A. Uy’s property company.

In a disclosure to the stock exchange on Thursday, H2O said its board of directors approved the sale of its water business to sister firm Tabuk Water Corp. ( Tabuk) for P442 million. Both parties have also signed a share purchase agreement for the transactio­n.

H2O’s water business is solely under Calapan Waterworks Corp. (CWWC), where it holds a total of 137.05 million common shares, or 99.75% of the issued and outstandin­g shares.

CWWC owns and operates the local waterworks system of Calapan City, Oriental Mindoro. The company serves 22 urban barangays and 13 adjoining rural barangays, connecting a total of 13,384 households as of 2016.

The spin-off of the water business is in line Memorandum of Agreement between H2O’s parent, Jolliville Holdings Corp. (JOH) and other related parties and Mr. Uy’s Udenna Developmen­t Corp. (UDEVCO) last December 2017. Here, JOH agreed to sell all its shareholdi­ngs, or 62.006%, in H2O to UDEVCO.

At least two-thirds of the shareholde­rs of H2O would have to approve the transactio­n before it can be completed, as well as the confirmati­on by UDEVCO and JOH.

UDEVCO will also be launching a mandatory tender offer for the H2O shares, as per the Securities Regulation Code.

Shares in H2O jumped 13.03% or 77 centavos to P6.68 apiece at the stock market’s close on Thursday, while parent JOH enjoyed a 7.54% increase or 37 centavos to P5.28 each. The two firms were among the top gainers for the day, defying the Philippine Stock Exchange index’s 1.14% drop to 8,515.57 as rising bond yields continued to put a pressure on global markets.

Mr. Uy’s property arm had earlier expressed interest taking its business public, saying it is considerin­g an initial public offering or backdoor listing.

UDEVCO currently operates Lapu- Lapu Land Corp., a Cebu-based firm undertakin­g the developmen­t of a $341-million Lapu-Lapu Leisure Mactan project. Spanning 12.5 hectares, the project will house a casino, retail complex, and hotels. The company looks to start the casino’s operations as early as 2019, ahead of the developmen­t’s target completion in 2022.

Mr. Uy has been steadily expanding his business since the start of President Rodrigo R. Duterte’s administra­tion. His logistics arm, Chelsea Logistics Holdings Corp., has been snapping up logistics firms to grow its reach after conducting a P5.84-billion IPO last June 2017.

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