AYALA CORP. (AC) is scheduling the entry of Razon-led Trident Water into Manila Water Co., Inc. (MWC) in about two months.
In a letter to the stock exchange Tuesday, the listed conglomerate said the shareholders agreement between AC and billionaire Enrique K. Razon, Jr. will take effect “after the closing of the subscription agreement, which will be after the annual stockholders’ meeting of MWC on April 17 and after regulatory approvals have been obtained.”
Among the clearances needed is the approval of the Securities and Exchange Commission on the denial of pre-emptive rights with respect to the issuance of shares to Trident Water.
Trident Water is a company yet to be incorporated by Mr. Razon’s infrastructure business Prime Metroline Holdings, Inc., which is handling the transaction with MWC for now.
“The closing of the subscription agreement is conditioned on the continuing effectivity of MWC’s material contracts,” AC added.
AC announced last week that Mr. Razon will be taking a 51% voting interest in MWC as its wholly owned subsidiary Philwater Holdings Co. is granting proxy rights to Trident Water.
Philwater currently owns 4 billion preferred shares in MWC representing 65.95% voting interest. With the granting of proxy rights to Trident Water, AC’s voting interest in MWC will be reduced to 31.6%.
This follows Mr. Razon’s acquisition of 820 million common shares or a 25% stake in MWC for P10.7 billion.
Mr. Razon’s Prime Metroline will be doing a tender offer in relation to the transaction, where MWC shares will be offered at P13 each.
The transfer of control in MWC to Mr. Razon is expected by analysts to result in an extension of its water contract — which is being threatened by the government since December — because of his alliance with the administration.
MWC, along with its fellow Metro Manila concessionaire Maynilad Water Services, Inc., is supposed to have its water contract effective until 2037, until President Rodrigo R. Duterte threatened to cut it short due to “onerous” terms. The Department of Justice is currently in the process of drafting a new contract.
Shares in MWC at the stock exchange fell 20 centavos or 1.53% to P12.88 each on Tuesday, while shares in AC lost P5.50 or 0.72% to P755.50 each. — Denise A. Valdez
