Mla Water closes at P6.90 in PSE debut

Manila Water Co. marked its debut at the Philippine Stock Exchange yesterday, reaching an intraday high of P7.60 a share before closing at P6.90, higher than the initial public offering (IPO) price of P6.50.

However, analysts said the listing of the Ayala-controlled water utility firm failed to perk up the market as most players opted to liquidate their holdings ahead of the weekend and next week’s long Easter holiday break.

The public offer, the first Philippine IPO with an international tranche since 1997, raised P3.6 billion for Manila Water’s expansion plans geared towards expanding its subscriber base within its concession area and refurbishing old facilities.

Manila Water has earmarked nearly P20 billion for its capital expenditures over a five-year period from 2004 through 2008. Of this amount, P3.95 billion has been set aside in 2005.

Manila Water offered earlier this month 745.3 million million shares, 67 percent or 471.285 million of which were sold in the international market.

Of the foreign subscribers, 60 percent came from Asia, 30 percent from Europe and 10 percent from the US.

The IPO is part of Manila Water’s 25-year concession agreement with the Metropolitan Waterworks and Sewerage System. Manila Water supplies drinking water to the east zone which covers major business districts such as Makati City, most of Quezon City, Pasig City, Marikina, San Juan, Taguig and Mandaluyong City.

Ayala Corp. remains the single biggest shareholder of Manila Water even after the IPO with a total of 30.2 percent, followed by UK-based water and power company United Utilities with 11.7 percent, International Finance Corp. (7.4 percent), Mitsubishi Corp. (7.9 percent), BPI Capital (3.9 percent), employees (4.2 percent), and the public (34.6 percent).

Manila Water has been posting aggressive growth rates over the past two years. Last year, the company reported a 16-percent growth in net income to P1.3 billion. In 2003, the utility firm more than doubled its profit to P1.2 billion. Higher billed volumes, an increase in service connections and continued improvement in non-revenue water accounted for the company’s strong performance.

To sustain its gains, the company is looking at exploring growth opportunities in other parts of the country and the Asian region. It is considering entering the Indian market by providing consultancy services.

Manila Water intends to continue developing new water sources, reduce its non-revenue water levels, expand sanitation services and adopt a low-cost decentralization sewerage strategy.