AYALA Corp. and its subsidiary are selling common and preferred shares in Manila Water Co., Inc. worth about P5.7 billion via a buyback transaction.
“The sale is aligned with Ayala’s strategy to rationalize its portfolio and raise P50 billion in proceeds. The proceeds will be used to pare down debt and/or fund future investments,” the listed conglomerate told the stock exchange on Wednesday.
Ayala and its unit Philwater Holdings Co., Inc. will sell around 289 million common shares and 436 million participating preferred shares, respectively, to Razon-led Manila Water.
It said that once the cash transaction is completed, Ayala will retain an effective 23.5% voting stake and an effective 22.5% economic stake in Manila Water.
Ayala said the Manila Water common shares were priced at P17.1647 apiece based on a 30-day volume-weighted average price as of Oct. 10, 2023, minus a 4% block discount, “aligned with the standard deal structure of block sales.”
It added that the preferred shares were priced on a negotiated basis at P1.7165 each, “considering the participation features of such shares to dividends to common shares on a 1/10 basis.”
Separately, listed water concessionaire Manila Water said the share repurchase had been executed as a regular block sale consistent with the rules and guidelines of the stock exchange.
Manila Water serves the east zone network of Metro Manila, covering parts of Marikina, Pasig, Makati, Taguig, Pateros, Mandaluyong, San Juan, portions of Quezon City and Manila, and several towns in Rizal province.
The water company holds the right to provide water and used water services to the east zone under a concession agreement entered into between Manila Water and the Metropolitan Waterworks and Sewerage System in August 1997.
Manila Water’s concession was extended by another 15 years by MWSS and the government in 2009, extending the term from May 2022 to May 2037.
On Wednesday, Ayala shares closed unchanged at P615.50 apiece, while Manila Water shares rose by 1.22% or 22 centavos to close at P18.20 each. — S.J. Talavera
