Ayala led-Manila Water Co. Inc. said that it would no longer acquire French firm Suez Environnement’s majority stake in Jakarta’s PT PAM Lyonnaise Jaya’s (Palyja) after failing to get the approval from the Indonesian state-run water company.
In a disclosure to the Philippine Stock Exchange, Manila Water said that Suez’s Indonesian partner Perusahaan Daerah Air Minum Daerah Khusus Ibukota Jakarta (PAM Jaya) refused to give its consent to the sale of the French firm’s controlling stake in Palyja.
“Please be informed that at the close of business hours yesterday, 2 July 2013, we have been furnished with the letter from PAM Jaya to Palyja informing the latter that PAM Jaya did not give its approval to the transfer of Suez equity in PALYJA to MWSAH,” Manila Water said.
Earlier reports told that Jakarta is considering an option to nationalize its water utility operation.
In October 2012, Manila Water said that it signed a share purchase agreement with Suez, transferring the French company’s majority stake in PALYJA to Manila Water South Asia Holdings Pte Ltd.
The agreement, however, required the consent of state-run water company PAM Jaya, as well as other regulatory approvals in Indonesia.
Manila Water, which operates the East Zone of state-run Metropolitan Waterworks and Sewerage System, said that it would turn to expansion outside the Philippines for future growth.
The company wanted to foray into the Indonesian market as part of its regional expansion, and has made headway in the Vietnamese market.
James Konstantin Galvez