Maynilad Water Services Considers $300 Million Funding Round Ahead of Potential IPO in 2025

Maynilad Water Services Inc., a water and wastewater service provider in Greater Manila, is reportedly considering raising approximately $300 million in a funding round ahead of a potential initial public offering (IPO) that could take place as early as 2025, according to sources familiar with the matter.

The company has allegedly selected HSBC Holdings Plc to assist with the pre-IPO round, with the aim of selling less than 10% of its equity. HSBC, along with Morgan Stanley, has also been chosen for the possible IPO in Manila, although the process remains confidential, the sources said.

The potential IPO is expected to value Maynilad at around $3 billion to $4 billion, with the company legally required to sell 30% of its shares to the public by the beginning of 2027 as part of a franchise agreement signed with the government in 2021.

If the pre-IPO round proceeds, the size of Maynilad’s IPO could be reduced to between $500 million and $700 million, compared to the initial target of $750 million to $1 billion, the sources added. However, details such as the offering size and the involvement of banks are subject to change as discussions are ongoing.

Responding to a query from Bloomberg News, Maynilad President and CEO Ramoncito Fernandez stated that the company regularly raises funds for its expansion but it is too early to specify any fundraising amount.

The potential IPO of Maynilad could potentially boost the IPO market in Manila, which saw only three listings in 2023, raising $72 million, compared to $315 million in 2022, according to data compiled by Bloomberg. Currently, only Citicore Renewable Energy Corp. has filed for a listing in the Philippines this year, with its debut expected on March 22.

Maynilad, headquartered in Quezon City, was established in 1997 and is operated by DMCI-MPIC Water Co., a joint venture between Metro Pacific Investments Corp. and DMCI Holdings Inc. In 2007, DMCI-MPIC took control of Maynilad, and in 2013, Japan’s Marubeni Corp. acquired a 20% stake in DMCI-MPIC, becoming a strategic partner.

–With assistance from Cliff Venzon.

©2024 Bloomberg L.P.

Maynilad Water Services Inc., a leading water and wastewater service provider in Greater Manila, is reportedly exploring the possibility of raising approximately $300 million in a funding round ahead of its potential initial public offering (IPO), which could take place as early as 2025. The move comes as the company seeks to finance its expansion plans and meet the requirements of a franchise agreement signed with the government in 2021. Maynilad is said to be considering a valuation of $3 billion to $4 billion for the IPO.

According to sources familiar with the matter, HSBC Holdings Plc has been selected to assist with the pre-IPO round, where less than 10% of the company’s equity will be sold. Additionally, HSBC, along with Morgan Stanley, has been chosen to handle the potential IPO in Manila. However, further details regarding the offering size and the banks involved are subject to change as discussions are ongoing.

If the pre-IPO funding round proceeds, Maynilad’s IPO size is expected to be reduced to between $500 million and $700 million from the initial target of $750 million to $1 billion. The company is legally required to sell 30% of its shares to the public by the beginning of 2027, as stipulated in the franchise agreement.

A successful IPO by Maynilad could potentially invigorate the IPO market in Manila, which saw a decline in listings in 2023 compared to the previous year. The water service provider’s IPO would be a significant addition to the market, given that only one company, Citicore Renewable Energy Corp., has filed for a listing in the Philippines this year.

Maynilad, headquartered in Quezon City, has been operating since 1997 and is currently managed by DMCI-MPIC Water Co., a joint venture between Metro Pacific Investments Corp. and DMCI Holdings Inc. With its extensive network of pipelines spanning approximately 7,500 kilometers (4,660 miles), Maynilad provides vital water and wastewater services to the Greater Manila area.

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