Ayala – the giant trying to acquire Sai Gon water sector

Ayala Corporation is the largest and richest in terms of tradition in the Philippines. The four pillars of the corporation

are Ayala Land in the field of real estate, Bank of the Philippine Islands (BPI) in the field of banking and finance, Globe Telecom in the telecommunications sector and Manila Water in the water supply sector.

Ayala marked the appearance in Vietnam in 2008 through the subsidiary Manila Water with the project to reduce water loss in area 1 of ​​Ho Chi Minh city, which worths 44 million USD.
In November 2011, the partnership Manila Water, Mitsubishi and Electrical Engineering Corporation proposed with Sawaco to develop similar projects in areas 4, 5 and 6. The Manila Water is hoping to conclude negotiations with Sawaco soon.

Recently, the drastic moves to acquire of Ayala Corporation caught investors’ attention. Starting with the spending of 42.6 million USD (nearly 900 billion VND) to hold 49% stake in Thu Duc Water B.O.O Corporation from CII in December 2011.

According to Global Water Intelligence, revenue of Thu Duc Water B.O.O Corporation in 2011 was 15 million USD (more than 300 billion VND) and net profit is 3.9 million USD (80 billion VND).
In May 2012, Ayala – through their subsidiary AIT Pte. Ltd has acquired 10% stake in CII and became the largest foreign shareholder and at the end of the year, they have 49% stake of Vietnam Philippines Infrastructure Investment Joint Stock Company (VPI)More than half a year later, Manila Water acquired 47% stake of Kenh Dong Water Supply Corporation – the company that produce 150,000m3 water/day. Plus the additional 350,000m3/day of Thu Duc Water B.O.O Corporation, companies that stakes owned by Manila Water currently provide about 25-30 percent of water for Ho Chi Minh City.

Holding 49% stake of VPI, it is not difficult for Ayala to link with a number of domestic investors to raise the voting rights to exceed 50%. VPI recently re-registered to buy 15% stake in CII .

With such a large impact, through CII and combined with capital contributed by Ayala or their subsidiaries, Ayala can take control practices in many companies in the water sector, despite being hampered by the capped ownership ratio of 49% of foreign investors.

(Source: ANT Consulting, CafeF)

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