The deal saw Manila Water’s wholly-owned subsidiary Manila Water South Asia Holdings Pte Ltd (MWASH) signed an investment agreement with Saigon Water for the acquisition of an additional 6.146 million primary shares of the Vietnamese firm.
Manila Water did not disclose the value of the acquisition but the 31.47 percent stake in Saigon Water acquired in October 2013 was valued at P642.76 million (about US$12.9 million).
“Under the Agreement, MWASH shall pay the subscription price after compliance by Saigon with all the Conditions Precedent, unless waived by MWASH,” Manila Water said in a disclosure to the Philippines Stock Exchange.
Listed in the Ho Chi Minh City Stock Exchange, Saigon Water is a Vietnamese holding company that builds water and wastewater treatment plants in addition to the provision of engineering, operations, and management services.
Saigon Water’s current investments include Tan Hiep 2 and Cu Chi Water. The former is a bulk water company which provides 300 million liters a day to the state-owned utility serving the area of Hoc Mon, Ho Chi Minh City. While Cu Chi Water distributes water to the Cu Chi district in Ho Chi Minh City with almost 75,000 water service connections.
Outside of the Ho Chi Minh City, Saigon Water has investments in a 20 million liter per day bulk water company as well as a water distribution firm in the major provinces of Gia Lai and Lam Dong, respectively.
On the other hand, Manila Water holds the exclusive right to provide water and wastewater services to the eastern side of Metro Manila called East Zone, where it currently serves more than six million customers, the East Zone covers 23 cities and municipalities spanning a 1,400-square kilometer area.
For the first quarter of this year, Manila Water reported a two percent decline in its net income to P1.449 billion from P1.481 billion in 2016 on higher costs from new investments and expansion initiatives.
Saigon Water aside, Manila Water is also affiliated with two Vietnam-based companies – the Duc Water BOO Corp and Kenh Dong Water Supply Joint Stock Company – which supply treated water to Saigon Water Company under a take-or-pay agreement.
Manila Water aims to double its net income to P11 billion (about US$221 million) by 2020 from P6.06 billion (about US$121 million), backed by projects involving its overseas expansion, water waste services, and other new businesses.