Manila Water doubles capital, prepares for IPO

The Ayala led utility Manila Water Co. (MWC) plans to double its authorized capital stock from P2 billion to P4 billion ahead of a planned initial public offering (IPO) in 2005.

Of the P2-billion capital increase, P500 million has been subscribed and paid by MWC majority shareholders:

Ayala Corp. (P310.34 million), UK-based United Utilities Pacific Holdings BV (P120.69 million), and BPI Capital Corp. (P68.96 million).

The fresh infusion of P500 million in preferred equity from MWC’s shareholders reinforces the group’s continued confidence in the sustained growth and financial strength of the water company, officials said.

The increase in capital will be implemented after completion of MWC’s acquisition of the International Water Ltd.’s interest in the utility firm.

IWL (formerly Ben MWSS Holdings Ltd.) is a subsidiary of US-based Bechtel Corp. and Edison SpA.

IWL decided to divest its shareholdings in MWC as part of its "global consolidation strategy."

The IPO is expected to generate P3 to P5 billion in proceeds which would help finance MWC’s P16-billion expansion program.

The IPO is part of MWC’s 25-year concession agreement with the Metropolitan Water Sewerage System (MWSS).

For this year, MWC is allotting P3 billion for its capital expenditures to fund its continuing pipe system upgrading and program to connect more new customers.

MWC, which provides water to residents of the East Zone of Metro Manila, has to replace about 300 kilometers of old pipelines that were inherited from the MWSS.