Maynilad in talks to acquire Calapan Ventures
MANILA, Philippines–Metro Pacific-led Maynilad Water Services Inc. is studying the prospective acquisition of Calapan Ventures Inc. (CVI), owner of the waterworks system of Calapan City in Oriental Mindoro.
“We’re looking at Calapan,” Maynilad president Victorico Vargas replied, when asked during a press briefing on Wednesday. However, he said discussions were still in the “preliminary stage.”
Asked whether the group was looking at other prospective acquisitions apart from CVI, the group is always on the look-out for opportunities, said Metro Pacific Investments Corp. chief finance officer David Nicol.
It was recently reported that CVI had opened itself up to the entry of new investors or a prospective merger and acquisition (M&A) deal. The company’s chair and chief executive officer Jolly Ting was authorized by the board to “enter into discussions and negotiations with interested third parties for possible merger or acquisition, joint venture or other arrangements that can enhance company value.”
CVI, which listed shares on the PSE’s second board in 2011 under the ticker H20, is a subsidiary of publicly listed Jolliville Holdings Corp. It is one of the few privately owned water systems in the country today.
As of end-2012, its water supply system was serving 17 urban barangays and 15 adjoining rural barangays with the number of household connections at 9,617.
Groundwater is the source of water supply in Calapan City. A total of five wells are operational with combined capacity of 146.93 liters per second. Potential locations of additional wells have been identified.
The group has an ongoing rehabilitation, expansion and improvement plan for its waterworks system in Calapan City, Oriental Mindoro. The purpose of the plan is to bolster water pressure, improve water quality, and to increase production so as to accommodate more subscribers. The scope, timing and extent of the works done vary depending on management’s discretion as to the economic viability of each component of the overall plan at a definite point in time.
The company also plans to invest in zoning works in 26 villages such as the installation of district meters and isolation valves. Also included is the cost of massive meter replacement in order to reduce leakages or non-revenue water to its target level of 20 percent.
