INVESTMENT holding company Philippine H2O Ventures Corp. will close the sale of its water business in Oriental Mindoro to subsidiary Tabuk Water Corp. next month in preparation for the entry of Davao-based businessman Dennis Uy’s group into H2O.
In a disclosure, H2O said the closing date for the P442-million sale of Calapan Waterworks Corp. (CWWC) had been set for April 5, 2018.
H2O’s board of directors approved the sale last February 22, after which H2O and Tabuk signed a share purchase agreement (SPA).
Under the deal, H2O will sell all its shares and interests in CWWC, consisting of 137 million common shares representing 99.75 percent of CWWC’s issued and outstanding capital stock.
CWWC is the owner and operator of the local waterworks system of Calapan City, Oriental Mindoro. It is engaged in the development and utilization of water resources to harness, produce and supply water for domestic, municipal, agricultural, industrial, commercial and/or recreational purposes.
Both CWWC and Tabuk are wholly owned units of H2O.
The closing of the sale is conditioned upon the approval of at least two-thirds of H2O shareholders and confirmation by Uy’s Udenna Development Corp. (Udevco) and Jolliville that the closing of the H2O sale will proceed.
Jolliville earlier said its board also approved an additional subscription in Tabuk of 440 million common shares at a price of P1 per share, also on the condition that the agreement between JOH and Udevco shall be consummated.
“The additional subscription will be paid in full pending approval of the SEC [Securities and Exchange Commission] of the increase in capital application of Tabuk,” Jolliville told the local bourse.
In December 2017, Uy’s Udevco struck a P327-million memorandum of agreement (MoA) with Jolliville to acquire 150.8 million shares in H2O, representing 62 percent of H2O’s issued and outstanding capital.
One of the requirements of the deal is the spin-off by H2O of all its existing business and assets. It was also mandated to collect all receivables, settle all obligations, assign its contractual interests, transfer or reassign its employees and settle or dissolve its retirement fund.
“Udenna shall launch a mandatory tender offer to H2O investors pursuant to the Securities and Regulation Code,” the statement said at the time.
H2O was incorporated as Calapan Equity Ventures, Inc. in 2009 as an investment holding firm. It is wholly-owned by the Jolliville Group.
Jolliville, incorporated in 1986, has principal business interests in leasing, technical services, property development and land banking, and a local waterworks system.