Enrique Razon moves to take control of embattled Manila Water

MANILA, Philippines — Ports and casino magnate Enrique Razon wants to take over the embattled Manila Water Co. Inc., offering to buy the rest of the shares in the Ayala-led utility before the renegotiation of its water contract begins.

In a disclosure to the stock exchange Friday, Manila Water said Razon-controlled Prime Metroline Holdings Inc. wants to make a tender offer for the shares of the water provider at P13 apiece.

Shares in Manila Water fell by more than 7% on Friday morning.

Earlier this week, Manila Water said Razon’s Prime Metroline Holdings acquired a 25-percent stake in the water firm at a price of P13 apiece. Ayala Corp. remains a shareholder with a 38.6% stake.

Razon, the fourth richest man in the Philippines, was given a 51% voting interest in Manila Water.

President Rodrigo Duterte has berated both Manila Water and Maynilad Water Services Inc. after a Singapore-based arbitration panel ordered the Philippine government to indemnify the two water providers for losses they suffered from an unenforced rate hike.

The president accused both companies of having government contracts with "onerous" provisions disadvantageous to the public and threatened to terminate their concession deals, sending their shares tumbling. The concessionaires have since dropped more than P10 billion in compensation claims from the government.

The Metropolitan Waterworks and Sewerage System, the Philippines’ water regulator, has rescinded the 15-year extension of the water concession deals, derailing the two utilities’ long-term plans.

Razon’s transaction with the Ayalas will infuse P10.7 billion in additional capital to Manila Water to support the company’s expansion plans and “growth initiatives.”

Malacañang last month warned both Manynilad and Manila Water that the government will take over the water sector and jail those involved in the crafting of the present contracts should the two firms reject the new agreements prepared by the state.

Business leaders have warned that moves against the two water companies could spook investors at a time Duterte seeks more private capital to bankroll his ambitious infrastructure plan.

READ: Palace clarifies Duterte's recent comment about killing oligarchs

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