MANILA, Philippines — West zone concessionaire Maynilad Water Services Inc. is looking to undertake its initial public offering (IPO) sometime in 2025 or 2026, a year or two ahead of the deadline set by the franchise granted by Congress.
In an interview with The STAR, Maynilad president Ramoncito Fernandez said the water company has started the process for its mandated maiden offering which is targeted in 2025 or 2026.
“Our legislative franchise granted to us by Congress states that we need to offer public offering on or before January 2027,” he said.
“We’ve started planning. We don’t intend to wait for that long, but it will be a process that we have to do and the right timing will be consulted with our shareholders,” Fernandez said.
Signed into law on Dec. 10, 2021, Republic Act 11600 grants Maynilad a 25-year franchise to establish, operate, and maintain a waterworks system and sewerage and sanitation services in the west zone service area of Metro Manila and the province of Cavite.
The law also requires Maynilad to publicly list at least 30 percent of its outstanding capital stocks five years from the grant of the franchise, and prohibits it from passing corporate income tax to customers.
Fernandez said other factors being looked before Maynilad’s listing include the prevailing market environment and attainment of its business plan.
“It’s the basic environment of the capital markets. And number two, it’s the progression of our business plan,” Fernandez said.
Earlier, the Maynilad chief said the company intends to conduct its IPO after its next rate rebasing cycle.
Rate rebasing is a process that determines the level of rates for water and sewerage services that permits the water concessionaires to recover over the life of the concession its operating, capital maintenance, and investment expenditures.
The MWSS Board of Trustees (BOT) approved on Nov. 10, 2022 the recommendation of the MWSS-Regulatory Office on the rate increases from 2023 to 2027 of the two water concessionaires.
Maynilad’s total increase for the five-year period is P13.31 to P13.69 per cu. m.
West zone customers will see a rate increase of P3.29 per cu. m. starting next year, P6.26 per cu. m. by 2024, P6.26 per cu. m. by 2025, P0.84 to P1.01 per cu.m by 2026, and P0.80 to P1.01 per cu. m. by 2027.
Beginning 2024, the implementation of the staggered rate will be dependent on Maynilad’s ability to attain its targets for water supply, continuity and coverage provided in its 2022 Approved Business Plan.
For 2026 and 2027, Maynilad’s rate increase will vary depending on whether the new water source – which is Kaliwa Dam – is completed on or before 2028.
Meanwhile, the increase in the Environmental charge from 20 percent to 25 percent of the basic water charge by January 2025 is subject to Maynilad’s attainment of sewer coverage of 25 percent by the end of 2024.
From 2023 to 2027, Maynilad has set a P163-billion spending for infrastructure projects that aim to sustain service improvements in the face of challenges, such as climate change and population growth.
The five-year service improvement plan seeks to enhance water security, environmental sustainability, service expansion and disaster resiliency.
Maynilad is the largest private water concessionaire in the Philippines. It serves the west zone or the areas of Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas, Malabon, and certain portions of Manila, Quezon City, Makati and Cavite.