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Japan’s Marubeni backs Maynilad’s planned IPO

By Revin Mikhael D. Ochave, Reporter

TOKYO, Japan — Marubeni Corp. is committed to investing in Maynilad Water Services, Inc. ahead of the water concessionaire’s planned public listing, an official of the Japanese conglomerate said.

“We, as Marubeni, will continue to contribute to Maynilad for their improvement and including the initial public offering (IPO), which is expected in a few years’ time,” Marubeni Environmental Infrastructure Department General Manager Kazuaki Shibuya said during a media briefing in the Japanese capital last week.

He was responding to questions on Marubeni’s plans as Maynilad prepares for its market listing.

“In time, I hope Maynilad will contribute to Marubeni’s profit. We are willing to continue our business in the Philippines. That’s our commitment,” Mr. Shibuya added.   

Marubeni has a 20% stake in Maynilad after Pangilinan-led Metro Pacific Investment Corp. (MPIC) and Consunji-led DMCI Holdings, Inc. sealed an agreement in 2013.

MPIC has a 53% stake in Maynilad while DMCI has 25%.

The commitment made by Marubeni comes as Maynilad targets to hold an IPO by 2026 as part of its revised concession agreement and the franchise signed with the government.

Maynilad is the water and wastewater service provider for the west zone of Metro Manila and some nearby areas.

Ramoncito S. Fernandez, Maynilad president and chief executive officer, said in a separate briefing that the water provider still has “enough leverage” to absorb more debt, but maintained that an IPO is needed at a certain point. 

“Moving forward, at a certain point, we will need the IPO to continue growing and continue investing,” Mr. Fernandez said.   

“As of today, up to a certain point, I think the next three years, we have enough leverage left. Our balance sheet can absorb additional debt. That’s why we have been tapping the debt market for the last two to three years,” he added. 

Mr. Fernandez disclosed the possibility that MPIC’s Metro Pacific Water Investments Corp. (MPW) would be folded into Maynilad before the IPO.

“Ideally, the growth story of Maynilad should include MPW before we list. That’s the ideal setup and both parties are working towards that,” Mr. Fernandez said. 

“Our enterprise valuation is too early to talk about but definitely, it will be a significant IPO when we go out, where we believe that the value that we’ve created and will continue to create will be of significant value,” he added.   

Mr. Fernandez said Maynilad is targeting P31 billion in capital expenditure next year. The water provider previously announced that it was aiming to spend P163 billion on infrastructure projects from 2023 to 2027.

“It will be spent within [the] next five years. P22 to P26 billion this year and P31 billion for next year. That’s the target,” Mr. Fernandez said. 

Aside from Maynilad, Marubeni has a presence in the Philippines in sectors such as financing and leasing, digital transformation, healthcare, transportation, and construction equipment.

MPIC, which has a majority stake in Maynilad, is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls.

Neil Banzuelo

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