Suez unit eyes 7.7% stake in Metro Pacific

Lyonnaise Asia Water Ltd. (LAWL), a unit of French utility giant Suez, plans to acquire a 7.7-percent stake in Metro Pacific Investments Corp. (MPIC) through a private placement valued at P2.03 billion.

In a disclosure to the Philippine Stock Exchange (PSE), MPIC said it will issue a total of 791.11 million shares to LAWL at P2.57 per share on or before June 30, 2009.

MPIC said the share issuance is subject to the compliance of certain closing conditions which include, among others, the execution of a definitive subscription agreement and the securing of the formal approval of the board of directors of the company. 

Following the issuance of shares, MPIC shall file with the PSE an application for the listing of these shares.

Upon completion of the increase in its authorized capital stock from P12 billion to P21.55 billion and the issuance of new shares, parent firm Metro Pacific Holdings Inc. stake in MPIC will go down to 90.4 percent from 97.3 percent.

Under the same agreement signed by both parties, MPIC will purchase 236,000 B shares held by LAWL in utility firm Maynilad Water Services Inc. for P2.03 billion. With the purchase, MPIC’s holdings in Maynilad will increase to 56.8 percent from the current 51 percent indirect stake through DMCI-MPIC Water Co.

MPIC’s acquisition of an additional stake in Maynilad is in line with with its objective to consolidate and support its utilities/infrastructure interests in the utility firm.

Suez Lyonnaise des Eaux is a world leader in private infrastructure services, managing municipal water systems for Buenos Aires, Santa Fe and Cordoba in Argentina and for the cities of La Paz, Bolivia and Limeira, Brazil.

Maynilad exited from a court-administered rehabilitation in February, repaying total outstanding debts of $232 million to local and foreign banks.

The company services more than six million residents in Manila or about half of the city’s population. It went into rehabilitation after its debts and finances turned sour partly due to a sharp peso depreciation following the Asian financial crisis of 1997.

Metro Pacific and the Consunji family’s DMCI won the right to jointly operate Maynilad with a $447-million bid in a government auction in December 2007.