Manila Water Co. Inc., the water distribution unit of Ayala Corp. (AC), has programmed a capital expenditure of US$ 269m over the next five years to bankroll the improvement of its network under the East Zone Concession.
Manila Water president Antonino T. Aquino said the company would draw from the US$30-m loan that it secured with the International Finance Corporation (IFC) in March 2003 in addition to using internally-generated funds. "We will be investing US$ 54m annually as part of our rate rebasing commitment," he said. "A lot of work has to be done to improve and rehabilitate our network so we can address the non-revenue water problem."
The company, he said, would continue to expand service reach, especially in the underserved areas of Taguig, Antipolo, and other towns in Rizal.
Aquino said that the US$ 54m to US$ 90m the company expects to raise from its proposed public offering in 2005 would be used to finance network improvements. The plan to sell Manila Water shares is part of its 25-year concession agreement with the state-controlled Metropolitan Waterworks and Sewerage System (MWSS).
Manila Water would be the third unit of the Ayala Group to be listed at the Philippine Stock Exchange (PSE) joining Globe Telecom and Ayala Land, Inc.
The shares of Ayala Corp. itself are also being traded at the PSE. Aquino said their financial advisors ING Barings and BPI Securities would likely come up with the IPO blueprint within the first half of the year.
Last year, Manila Water posted US$ 65m in revenues and achieved a net income of US$ 22m, double the previous year's level. These were driven by increased tariff rates, improved billed volumes and maintained cost efficiencies.
