French investor plans to keep stake in Maynilad

The French multinational Suez Lyonnaise des Eaux has expressed its intention to stay in the Maynilad water project when the Arroyo administration puts it back in the market for privatization after the pull-out of the Lopez-owned Benpres Holdings.

Finance officials told reporters yesterday that the French group has "every intention" of staying in the project once the smoke clears out on the government take over.

Finance Secretary Juanita Amatong reiterated yesterday that the government has no intention to take over permanently. She said the plan is to ultimately get another operator to take over.

"We would still like the private sector to do this, government should not be in it anymore," said Amatong. ‘But right now we have to sort out a lot of things first."

Amatong said, the Arroyo administration is confident that a good number of investors remain interested in the project despite the failure of the Lopez group.

Before the government took-over, Maynilad was 60 percent controlled by the Lopez-owned Benpres Holdings, and the remainder was held by Ondeo Waters, an affiliate of Suez Lyonnaise des Eaux.

Ondeo had expressed a design to pull out of the consortium last December after Maynilad hit hard times. Sources said Ondeo was reportedly not interested in holding on to its interest in Maynilad and this would force the MWSS to take over the former’s holdings in the utility.

According to Amatong, however, Ondeo wants to stay in the consortium although the ultimate decision will depend on how the government will handle the take-over and what its plan will be for eventual privatization.

"The French group is still very much interested, they want to stay," Amatong said.

The initial pull-out of Ondeo had forced the Arroyo administration into a $20-million debt-for-equity swap that gave the government a 30-percent share in the collapsed consortium. The plan is to swap the rest of the foreign-held interest this year in the second stage of the take-over.

If Ondeo wants to stay, Amatong said the flavor of the deal will be changed and this will possibly improve the chances of getting another local operator to takeover Maynilad.

If Ondeo ultimately decides to leave, government will have to take over its shares too and it will become more difficult to organize another consortium to take over Maynilad.