P34-B Maynilad IPO launches amid market slump

Pangilinan-led Maynilad Water Services, Inc. staged its P34-billion trading debut Friday, attracting investor interest in infrastructure and utilities, even as the Philippine Stock Exchange plunged to a three-year low.

The country’s largest water concessionaire by connections and population served listed under the ticker MYNLD, opening at its offer price of P15 per share. However, prices closed slightly lower at P14.98, dragged by the negative reaction on the slower-than-expected economic growth.

The debut followed an upsized offering that included 1.66 billion primary common shares and 24.9 million shares sold to First Pacific Company Limited, with another 354.7 million secondary shares issued after the full exercise of the upsize option on 24 October.

Stabilizing agent UBS AG, Singapore Branch, was also granted an overallotment option of up to 249.04 million primary shares, exercisable within 30 days.

The IPO, according to Maynilad, was 2.7 times oversubscribed, backed by investors from Asia, Europe, the Philippines and the United States.

Cornerstone support came from the International Finance Corp. (IFC), the Asian Development Bank (ADB) and 10 other institutional investors spanning Malaysia, the UK, Hong Kong, Singapore and Switzerland, as well as local firms BDO Capital, BPI Asset Management, Metrobank Trust and Security Bank’s asset arm.

Fueling expansion

Speaking to reporters before a bell-ringing ceremony, Maynilad president and CEO Ramoncito S. Fernandez said proceeds will help fund the company’s capital expenditures, business expansion and long-term sustainability programs for its water and wastewater operations.

“This marks the beginning of a new chapter for Maynilad. Apart from fulfilling one of the terms of our legislative franchise, this IPO enables us to pursue our long-term expansion plans for our water and wastewater businesses,” Fernandez said.

“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,” he added.

Impact on essential services, capital markets

Development lenders backing the offer highlighted its impact on both essential services and capital markets.

“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.

“The expansion and modernization of water and wastewater infrastructure will contribute to improved climate resilience, public health, economic productivity, and social and economic development,” he added.

Echoing this, IFC Philippines country manager Amena Arief said the investment supports both service delivery and market deepening.

IFC enthusiasm

“IFC is proud to participate in Maynilad’s IPO to help the Company expand and enhance its wastewater services in the coming years,” she said.