The Ayala group is expanding its presence in Vietnam by acquiring a “significant minority” interest in a leading infrastructure company and a bulk water supply company in Ho Chi Minh City.
In a statement, Ayala Corp. and subsidiary Manila Water Co. announced that they had won the right to buy a 10-percent stake in Ho Chi Minh City Infrastructure Investment Joint Stock Co. (CII) and a 49- percent interest in Kenh Dong Water Supply Joint Stock Co. (Kenh Dong).
“This investment primarily supports and complements the expansion of Manila Water Co. as it gradually builds its presence in Vietnam. At the same time, this also provides strategic access to other related infrastructure opportunities which may be of value to the group,” Ayala president and Manila Water chair Fernando Zobel de Ayala said.
“We recognize Vietnam is a high growth area in the region and there is strong demand for infrastructure investments. This may potentially present opportunities for the Ayala group to establish presence across several sectors.”
Ayala had offered to buy a 10-percent stake in CII, which is listed on the Ho Chi Minh Stock Exchange, concurrent with MWC’s offer to acquire a 49-percent stake in Kenh Dong.
Formed in 2001, CII is a leading player in the infrastructure sector in Vietnam with a solid track record in implementing and operating infrastructure assets. The company has a portfolio of strategic infrastructure assets, including water treatment plants and toll roads serving Ho Chi Minh City and surrounding areas. It also holds a stake in Thu Duc Water BOO Corp. a water treatment company, which is now 49-percent-owned by Manila Water.
In addition to water infrastructure, CII holds toll road concession agreements such as the 15.7-kilometer expansion of the existing Ha Noi Highway which connects the northeastern part of Ho Chi Minh City to Bien Hoa, an industrial center located in the southern part of Vietnam.
Kenh Dong was established in 2003 to build, own and operate major water infrastructure in Ho Chi Minh City. Its water treatment plant is expected to start operations by the second half of 2012 with a capacity of 200 million liters per day. Kenh Dong has a bulk water supply contract with Saigon Water Corp. (Sawaco) for a guaranteed volume of 150 mld.