Maynilad debuts on PH stock market, raises P34.3-B

Maynilad Water Services Inc. on Friday debuted on the Philippine Stock Exchange (PSE) after raising P34.3 billion in one of the most anticipated and largest initial public offerings (IPO) in the country.

President Ferdinand “Bongbong” Marcos Jr. led the bell ringing ceremony for Maynilad’s PSE debut, marking the listing of the water utility’s shares for public trading.

Maynilad’s share price opened at P15 apiece, at par with its IPO price. It currently trades steady at a high of P15 per share and a low of P14.98 per share.

Maynilad will utilize the proceeds from its IPO to fund the company’s capital expenditure requirements and for general corporate purposes.

“This marks the beginning of a new chapter for Maynilad. Apart from fulfilling one of the terms of our legislative franchise, this IPO enables us to pursue our long-term expansion plans for our water and wastewater businesses,” said Ramoncito Fernandez, president and CEO of Maynilad. 

“The investments we have received signals confidence in our vision and plans to strengthen our positioning as a pure-play sustainability company, one that aims to continue bringing positive impact and value to our West Zone concession and beyond,” said Fernandez.

The water utility’s IPO attracted 12 cornerstone, or large institutional, investors, both foreign and local.

The lead cornerstone investors are the International Finance Corp. and the Asian Development Bank, while the international cornerstone investors are abrdn Malaysia Sdn. Bhd., the UK’s Foreign, Commonwealth and Development Office (through its MOBILIST programme), Maven Investment Partners Ltd. – Hong Kong Branch, Maybank Asset Management Singapore Pte. Ltd., Robeco Switzerland Ltd. and QRT Master Fund – Torus Fund SP. 

The domestic cornerstone investors are BDO Capital & Investment Corporation, BPI Asset Management and Trust Corp., Metropolitan Bank & Trust Company – Trust Banking Group and Security Banking Corp. – Trust and Asset Management Group.

In a separate news release, the IFC, a member of the World Bank Group, said it has invested $100 million (about P5.9 billion) as an institutional investor in the IPO of Maynilad.

“IFC is pleased to join Maynilad’s IPO as a cornerstone investor, supporting the company’s goal of reaching full wastewater service coverage in the years ahead,” said Amena Arif, country manager for the Philippines at IFC. 

“This investment reflects our focus on enhancing services for the Filipino population, while also highlighting IFC’s ongoing efforts to bolster capital market activity in the country,” said Arif.

“This investment highlights our commitment to helping provide clean, accessible, and reliable water and safe sanitation services, to millions of Filipino households, commercial and institutional users,” said ADB Philippines country director Andrew Jeffries. 

“The expansion and modernization of water and wastewater infrastructure will contribute to improved climate resilience, public health, economic productivity, and social and economic development,” said Jeffries.

Expansion

Maynilad is also looking at expanding its services outside its concession area, particularly in Cavite and Bulacan, and possibly acquiring other firms.

According to Fernandez, the firm is looking at offering its services to the adjacent local governments in the north and in the south of its concession area.

“There are still specifically the adjacent cities... beside our borders, our boundaries, wanting for services,” he said in a virtual briefing.

“That’s a possibility for us that we can offer to these LGUs that are wanting improved services, both in the boundaries in Bulacan and the boundaries in Cavite,” he added.

Maynilad’s west zone concession area currently covers the cities of Caloocan, Las Piñas, Makati, Malabon, Manila, Muntinlupa, Navotas, Parañaque, Pasay, Valenzuela and Quezon City. It also services certain areas in Cavite such as the cities of Bacoor, Cavite, and Imus; and the towns of Kawit, Noveleta, and Rosario.

“Our only position here, Maynilad, is that we can support these adjacent cities and municipalities in the north and in the south, and it’s up now to these municipalities to whether avail of our services, talk to us, negotiate with us, and then we will do the rest after,” Fernandez said.

Asked regarding the coverage of the concession agreement, Fernandez said this could possibly be renegotiated to include more areas.

“That’s a possibility but definitely, our distinct advantage is we are already there at the border. Our facilities are already there, so that’s a distinct advantage,” he said.

Fernandez also said that the company is open to acquire other firms, provided that they are value-adding for Maynilad.

“It depends on a lot of factors. The main consideration will be value. What will be the value that the owners will require from the buyer at the end of the day? That’s one basic question,” he said. —with report from Jon Viktor D. Cabuenas/ VAL, GMA Integrated News