Manila Water to borrow $40M in new loans for 2007 capex

Ayala-controlled utility firm Manila Water Co. plans to tap as much as $40 million in new loans next year to fund its capital spending for 2007.

In a disclosure to the Philippine Stock Exchange, Manila Water said negotiations for the loan will start next year. It has held initial discussions with the lenders are merely in the exploratory stage.

The utility firm has earmarked P4 billion this year and another P4 billion in 2006 for its capital expenditures.

Manila Water earlier said it will form a separate company to invest in overseas and domestic water supply and sewerage projects that are outside its current business focus.

The new corporate vehicle will focus on water-supply and sewerage-service projects in key cities in the Philippines, as well as management contracts in India, and possibly other Asian countries.

Manila Water had been prequalified to bid for a water supply and sewerage services project in Delhi, India. It teamed up with Larsen and Toubro Ltd., India’s largest engineering and construction firm and the Mahindra Group, one of India’s leading conglomerates, to bid for the project.

The utility firm is into a major network improvement program in Metro Manila’s east zone, which includes the development of new water sources and wastewater projects amounting to over P20 billion spread over the next five years.

Outside the east zone concession, the company is eyeing the potential development of water projects in other provinces including a bulk water supply project in Cebu.

Manila Water is also part of a consortium evaluating the viability of taking over the rehabilitation of the debt-saddled Maynilad Water Services Inc., its counterpart in the west zone.

Manila Water supplies drinking water to over five million customers in major business districts in the cities of Makati, Pasig, Taguig, San Juan, Mandaluyong and Quezon City and residential areas in Marikina, Pateros, Cainta, Taytay, Montalban and Antipolo and extending up to the Rizal towns of Angono, Binangonan, Baras and Jala-jala.