Maynilad makes splash with P34.3 billion IPO

MANILA, Philippines — Maynilad Water Services Inc. made a splash in its market debut yesterday after raising P34.3 billion from its maiden offering, the second largest initial public offering (IPO) in the history of the Philippine Stock Exchange (PSE).

Maynilad was listed in the PSE yesterday under the symbol “MYNLD,” opening at P15 per share, same as its IPO offer price. Its share price closed slightly lower by 0.13 percent to P14.98.

“This listing is not just about franchise compliance, nor is it just about capital raising. It is, above all, a commitment to continue delivering essential services, with integrity and excellence,” Maynilad chairman Manuel V. Pangilinan said during the company’s listing ceremony attended by President Marcos yesterday.

“We thank our new investors for their confidence. We are humbled by their overwhelming response, which signals confidence in our fundamentals, and in the attraction of the Philippines and its capital market,” Pangilinan said.

In his speech, President Marcos said the public listing reflects the growing confidence in the Philippine market.

“We mark a milestone for our country’s water sector, our stock market, and for our economy. The listing of Maynilad Water Services on the Philippine Stock Exchange is a sign of confidence in our markets and in our people,” Marcos said.

Marcos said Maynilad’s IPO encourages more investors while promoting transparency and responsible management of water resources.

“So truly, Maynilad’s public listing signals what I have been telling the world: that the Philippines is open, ready and eager to do business with you.”

Maynilad chief financial officer Ricardo Delos Reyes said the IPO was 2.7 times oversubscribed, with cornerstone investors taking 61.1 percent of the shares offered.

In terms of distribution by geography, Delos Reyes said that Asian investors cornered 53.6 percent of the allocation, followed by local investors at 29.6 percent, European investors at 14.7 percent and American investors at one percent.

Proceeds from the IPO will be used by Maynilad to fund its capital expenditures requirements and for general corporate purposes.

Maynilad offered and sold 1.66 billion primary common shares to the public and 24.90 million primary common shares to First Pacific Co. Ltd. 

The offer shares were increased by 354.70 million secondary common shares to be offered by Maynilad Water Holding Company Inc. following the exercise of the upsize option in full on Oct. 24. 

In addition, the company granted the stabilizing agent, UBS AG, Singapore branch and its relevant affiliates, an overallotment option of up to 249.05 million primary common shares exercisable from time to time for a period of not more than 30 calendar days from and including the listing date.

The offer attracted 12 cornerstone investors, both foreign and local. 

The International Finance Corp. (IFC) and the Asian Development Bank (ADB) were the lead cornerstone investors, while the international cornerstone investors are abrdn Malaysia Sdn. Bhd., the UK’s Foreign, Commonwealth and Development Office (through its MOBILIST program), 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, meanwhile, are BDO Capital & Investment Corp., BPI Asset Management and Trust Corp., Metropolitan Bank & Trust Co.–Trust Banking Group and Security Banking Corp.–Trust and Asset Management Group.

“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,” ADB Philippines country director Andrew Jeffries said.

“IFC is proud to participate in Maynilad’s IPO to help the company expand and enhance its wastewater services in the coming years. This investment signifies our commitment to improving the supply and quality of water for Filipinos and underscores IFC’s role in strengthening capital market development in the Philippines,” IFC Philippines country manager Amena Arief said separately.

Maynilad president and CEO Ramoncito Fernandez said the listing marks the beginning of a new chapter for the company. 

Apart from fulfilling one of the terms of the Maynilad’s legislative franchise, he said the IPO enables the company to pursue its long-term expansion plans for its water and wastewater businesses.

“It was a good journey--long, but I think very fulfilling. And judging from the results of the IPO, as I said, we made the right decision,” Fernandez said.

Maynilad was originally aiming to be listed on the main board of the PSE on July 17, but the previous target listing date was adjusted to accommodate robust potential demand from strategic cornerstone investors.

“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,” Fernandez said.

For Pangilinan, Maynilad’s story is one of transformation and growth.

He said that from an ailing utility, Maynilad is now a world-class water and wastewater service provider, enabling the company to open its doors wider to new investors, local and international. 

“Eighteen years ago, we took on a company sequestered by the government due to serious operational and financial difficulties. we believed then, as we do now, in the critical role water plays in people’s lives,” Pangilinan said.

“Within this single element called water dwells all the ironies of Philippine life. We, at Maynilad work hard to ensure that water supply remains constant and adequate. As a nation of 7,651 islands, we must not simply consume God’s creations, but work together to harness its blessings. This collaborative philosophy is what shapes and defines Maynilad,” he said.

Maynilad is the second company to list on the PSE this year, following Top Line Business Development Corp.’s P732.6-million IPO in April. It is also the biggest IPO since May 2021, when Monde Nissin raised P48.6 billion from its own public offer.

PSE president and chief executive officer Ramon Monzon said that ADB and IFC’s support, as well as that of other international cornerstone investors, in Maynilad’s IPO disproves “the doomsayer’s claim of foreign investor disinterest in our market.”

“Maynilad’s sustainable business activities will be further supported by this IPO as it will use the majority of the capital raise to fund its water sources and treatment programs aimed at water security, including the development of future water sources, enhancement of operational efficiencies, and climate-proofing of its capital assets,” Monzon said. 

“I want to congratulate Maynilad Water Services Inc. on its already successful IPO. As they say, fortune favors the brave,” he said. — With Helen Flores