Maynilad Water Services Inc. has received regulatory approval from the Securities and Exchange Commission for its initial public offering (IPO) to raise P45.78 billion.
The SEC said the IPO was approved on Friday, May 30, with an offer price of up to P20 per share.
The IPO will offer a total of 2.29 billion shares to the public, divided into 1.93 billion primary shares and 354.7 million secondary shares to be offered by Maynilad Water Holding Company Inc. (MWHCI).
Of the primary shares, 1.66 billion shares will comprise the firm offer. In comparison, a further 249.05 million primary shares have been set aside for the greenshoe option, which is intended to cover potential excess demand.
The company has also set aside an additional 24.9 million shares for sale to First Pacific Co., Ltd.
The proceeds of the offer will be used to partially fund the company’s capital expenditures of P68.46 billion for the year, with a focus on projects related to water, wastewater, customer service and information systems.
The program includes the acquisition of lots preparatory to the construction of a water treatment plant in Teresa Rizal for 300 million liters per day (MLD), as well as the installation of a 46-kilometer conveyance
to coincide with the completion of the MWSS’ New Centennial Water Source-Kaliwa Dam.
“It also covers projects relating to Angat and Ipo for the rehabilitation and refurbishment of the appurtenances of the common purpose facilities to improve raw water conveyance efficiency and increase the reliability of the Bigte-Novaliches Aqueducts,” Maynilad said.
The company also plans to expand its water supply infrastructure and operations to ensure 24-hour water availability at a minimum pressure of 16 psi, expand water coverage, enhance reliability, flexibility, and adaptation to climate change, and acquire the right-of-way (ROW) and necessary land for water facilities.
The SEC noted that Maynilad could net up to P37.41 billion from the share sale, assuming the overallotment option and preferential offer are fully subscribed.
About 70 percent of the firm-offer shares will be offered to investors overseas.
The offer period will run from July 3 to 9, with the shares expected to be listed on the main board of the Philippine Stock Exchange on July 17, according to the latest timeline submitted to the Securities and Exchange Commission (SEC).
Maynilad tapped BPI Capital Corporation, The Hongkong and Shanghai Banking Corporation Limited, Morgan Stanley Asia (Singapore) Pte., and UBS AG, Singapore Branch as joint global coordinators and joint bookrunners for the offer.
Seth Pangan, a trader at Diversified Securities Inc., said the market is looking forward to the water utility’s IPO, given the business’ defensive nature.
“This is a utility, thus defensive, just like Meralco — used daily by consumers,” he said.
