Maynilad Water Services, a joint venture between Metro Pacific Investments and DMCI Holdings, is close to selling a 20 per cent stake to Marubeni of Japan for about P19 billion.
Maynilad chief operating officer Herbert Consunji said in an interview at the sidelines of the annual stockholders’ meeting of DMCI Holdings that DMCI had agreed to sell its 16 per cent stake in the water concessionaire to Marubeni while Metro Pacific would sell 4 per cent.
DMCI will receive P14 billion from the sale while its ownership in the water company will drop to 25 per cent from 41 per cent. The deal is expected to close by September.
DMCI president Isidro Consunji said the company would use proceeds from the sale to expand the company’s power, infrastructure and mining projects. The company is currently rehabilitating the Calaca power plant and plans to acquire nickel mining assets.
Consunji said DMCI’s 2012 profit was expected to rise 10 per cent to a little less than P11 billion from P9.5 billion in 2011. He said coal mining unit Semirara Mining Corp. would likely report a flat growth in the first six months, owing to lower coal prices in the world market.
He said DMCI was also planning to participate in the public-private partnership projects as a contractor of the government.
Meanwhile, Consunji said the entry of Marubeni to Maynilad would enable the water distributor to have access to low-cost capital. Marubeni will also bring in human resources to improve the operational efficiency of water system, he said.
Maynilad posted a net income of P5.9 billion in 2011, up by 22 per cent from P4.8 billion posted in 2010 as billed water volume rose 8.3 per cent.
The water company targets to book P6.6-billion net income this year, up by 11 per cent from the 2011 level.
Maynilad, the water concessionaire for the west zone of Metro Manila, earlier said it was planning to invest P50 billion in its concession area over the next five years.
It committed to spend P8.5 billion in capital expenditures this year alone.
Metro Pacific and DMCI, through its joint venture company DMCI-MPIC Water, took control of ailing Maynilad in 2007. The joint venture turned the finances of Maynilad around over a five-year period when it invested P42 billion, primarily to replace old water pipes, increase water connections and reduce non-revenue water.
Maynilad’s concession area covers Manila (all but portions San Andres and Sta. Ana), Quezon City, including west of San Juan River, West Avenue, Edsa, Congressional Ave., Mindanao Avenue, Batasan Hills, Makati, Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Malabon and Cavite City.
