Maynilad settles loan, gets clean bill of health

The Maynilad Water Services Inc. has been officially declared as being in good financial health with the Rehabilitation Court stamping its approval on the water concessionaire’s petition to exit rehabilitation after the company settled all its loans worth more than $200 million.

With the approval, the company, which services the “West Zone” Metro Manila, said it can now focus on the implementation of its capital expenditure program that aims to reach 24-hour supply and 100-percent coverage of the west concession by 2012.

The official approval came last Wednesday after the water concessionaire was able to settle all its foreign loans and those from the Metropolitan Waterworks and Sewerage System.

The court presided by Judge Reynaldo Daway said Maynilad’s petition to “terminate corporate rehabilitation proceedings” have been approved “on account of petitioner’s successful implementation of the 2005  revised rehabilitation plan approved by this court on June 1, 2005.”

The water concessionaire noted that it was one of the fastest loan settlements by companies that have bounced back from financial crisis.

“We prepaid a total of approximately $232 million of loans from local and foreign banks and to MWSS,” said Maynilad chief financial officer Randolph Estrellado.

According to the company, these loans were originally scheduled to be fully paid by 2013, as provided in the debt and capital restructuring agreement (DCRA).

A requirement submitted by Maynilad to get out of rehabilitation was a prepayment and settlement agreement (PSA) with its creditors.

Rehabilitation receiver Rosario Bernaldo submitted to the court her sworn certification that Maynilad has implemented the full prepayment and settlement as set forth in the PSA, and satisfied all other payment requirements.

Estrellado said the company has been cleared of all its debts since Jan. 18, 2008.

The company almost shut down four years ago after it was hard hit by the 1998 Asian financial crisis.

The firm then filed for corporate rehabilitation to allow it to continue operating under the financial restrictions of the DCRA.

Estrellado  explained that with company now out of rehabilitation, Maynilad has gained access to more sources and less expensive forms of financing such as developmental loans to finance its water supply improvement projects.

“Getting out of rehab allows us to accelerate our capital expenditures and helps us deliver improved services to our consumers at a faster pace,” he said.