Japan's Mitsubishi sells part of Manila Water stake amid arbitration

MANILA, Philippines – Ayala Corporation, the country's oldest conglomerate, has acquired Mitsubishi Corporation’s 5.7% stake in water distributor Manila Water Company Inc. for P2.8 billion.

In a disclosure to the Philippine Stock Exchange, Ayala said it acquired 140 million Manila Water shares for P20 per share, which was a 6% discount to the utility firm's closing price of P21.35 in the market on Monday, December 16.

This brought Ayala's stake in Manila Water to 48.8% from 43.1%.

Mitsubishi, a Japanese partner of Ayala since 1974 and a shareholder of Manila Water since 1992, will continue to hold 1.2% of the company.

Mitsubishi’s partial divestment came amid the arbitration between Manila Water and regulator Metropolitan Waterworks and Sewerage System (MWSS) over water rates.

Manila Water in September formally filed before the International Chamber of Commerce a dispute notice after MWSS ordered a reduction in the company's water rates.

Ayala president and chief operating officer Fernando Zobel de Ayala said they are "pleased to have this opportunity to increase its stake in Manila Water. Manila Water has consistently shown its ability to deliver world-class water and wastewater services, which brings countless benefits to the local and international communities in which it operates."

"We believe in the long-term growth potential of Manila Water as it continues to expand outside the East Zone of Metro Manila into other areas here and abroad that are in critical need of reliable water and wastewater services," Zobel added.

Manila Water is the water concessionaire in Metro Manila's east zone, which covers Makati, Mandaluyong, Pasig, Pateros, San Juan, Taguig, Marikina, and parts of Manila and Quezon City, as well as Rizal province.

The company also controls water concessionaires in Boracay, Laguna and Clark. It was recently awarded a water supply project in Cebu. – Rappler.com