Razon gets voting rights in Manila Water

TYCOON Enrique Razon Jr. obtained majority voting rights in Manila Water Co. Inc. after the water company clinched a P10.7-billion deal with the ports magnate, its parent firm Ayala Corp. said on Thursday.

In a disclosure, the conglomerate said that as part of the shareholder agreement to be executed among Ayala Corp., Ayala subsidiary Philwater Holdings Co. and Trident Water, its executive committee “approved the grant of proxy rights by Philwater to Trident Water over such number of preferred shares to enable the latter to achieve 51-percent voting interest in Manila Water.”

“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,” it added.

Philwater holds 4 billion preferred shares in Manila Water, representing 65.95 percent of voting shares in the East Zone concessionaire.

With this transaction, Ayala’s effective voting interest in Manila Water will decline to 31.6 percent.

“This arrangement aims to strategically rationalize the economic and voting stakes between Ayala and Trident Water as strategic partners in Manila Water,” it added.

On Monday, Prime Metroline Holdings Inc., Razon’s infrastructure company, acquired a 25-percent stake in Manila Water following the signing of a subscription agreement by both parties.

The agreement covers 820 million common shares of the Ayala-led utility, valued at P13 apiece.

Manila Water Chairman Fernando Zobel de Ayala had said the partnership with the Razon group would “result in clear synergies to achieve Manila Water’s long- term goal of providing sustainable water and wastewater services to our customers in the East Zone of Metro Manila and in the other markets we serve.”

Prime Metroline would incorporate the new entity, to be called Trident Water, for forging its partnership with the Ayalas.

For his part, Razon said his company “will dedicate our efforts to further develop this unique business both here in the Philippines and abroad.”

“We are confident that our collective experience, technical capabilities, and corporate synergies will be of great benefit to Manila Water, the people it serves, and its other stakeholders,” he added.

Both the Ayalas and Razon have sealed a deal in the past. Manila Water inked last August a 30-year raw water supply agreement with the Metropolitan Waterworks and Sewerage System ( MWSS) and WawaJVCo Inc., a joint venture of Prime Metroline and Violago-led San Lorenzo Ruiz Builders and Developers Corp.

Manila Water shares soared by P1.34 or 9.84 percent to end at P14.96 each on Thursday.