Metro Pacific approves deal to buy out French partner in Maynilad

MANILA, Philippines - Metro Pacific Investments Corp. (MPIC), which has investments in tollways and utilities, said it bought out its French partner in Maynilad Water Services Inc. (MWSI) through a share swap arrangement. MPIC has approved the transaction in principle, the company said in a disclosure to the Philippine Stock Exchange (PSE). Under the arrangement, MPIC will issue 791.1 million common shares to Lyonnaise Asia Water (Holdings) Pte Ltd. (LAWL) by way of private placement. Amounting to a total of P2.03 billion with each share priced at P2.57 each, the whole lot is equivalent to 7.75 percent of the fully diluted share capital of MPIC. Shares issued to LAWL – a unit of France’s Suez SA – will originate from the MPIC’s authorized capital stock increase and new shares, excluding those previously allotted for an employee stock option program. The transaction, which will close on June 30, 2009, will make LAWL the second-biggest owner of MPIC, next to Metro Pacific Holdings Inc. The remaining 1.9 percent is publicly-traded. LAWL is then expected to sell 236,000 Class B Maynilad common shares with par value of P1,000 each or an aggregate price of P2.03 billion to MPIC. Once completed, the transaction will allow MPIC to acquire all rights, title, interests of LAWL “in line with its objective to consolidate and support its utilities/infrastructure interests" in Maynilad, which serves Metro Manila’s West Zone. MPIC’s stake in Maynilad is then expected to increase to 56.8 percent. Of this figure, 51 percent comes from its indirect interest through its joint venture, the DMCI-MPIC Water Co. Inc. The remaining 5.8 direct stake will come from LAWL. MPIC is the local unit of Hong Kong-listed First Pacific Co. Ltd., which also controls Philippine Long Distance Telephone Co. From January to September last year, MPIC earned P143.3 million, reversing losses worth P170.6-million a year ago. During the same period, Maynilad’s profits reached P1.75 billion, P735.6 million of which went to MPIC representing its equity interest, which was 75 percent higher than in 2007. - GMANews.TV