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By Euan Paulo C. Añonuevo, Reporter
MAYNILAD Water Services, Inc.
signed agreements with the government and lenders, paving the way
for the utility’s early exit from rehabilitation.
The accords also gives the holder
of the West zone concession of state-run Metropolitan Waterworks and
Sewerage System (MWSS) more financial flexibility in the
implementation of supply improvement projects throughout its covered
area.
“We’ve been anticipating this
day ever since. Now Maynilad can move forward on a much faster
pace,” Rogelio Singson, Maynilad president, said.
The recently signed agreements with the MWSS, MWSS-Regulatory
Office, Office of the Government Corporate Counsel and Maynilad’s
lenders include a Prepayment and Settlement Agreement (PSA) and a Transitional
and Clarificatory Agreement (TCA).
The agreements will be submitted
to the court hearing the company’s rehabilitation next week for
approval, completing Maynilad’s exit plan.
Maynilad has been under rehabilitation and debt restructuring since
it filed for concession termination in 2003, after incurring heavy
losses largely due to the Asian financial crisis. Majority
shareholder Benpres Holdings Corp. bailed out of the utility leaving
government with the controlling stake in the company.
Last year the government
auctioned off its controlling stake, with the DMCI Holdings
Inc.-Metro Pacific Investment Corp. (MPIC) consortium winning the
bid.
Since the consortium’s entry
into the water utility, Maynilad, MWSS and the utility’s lenders
have been in the thick of negotiations for the company’s early
exit from rehab. Under the rehabilitation plan and the Debt and
Restructuring Agreement (DCRA), Maynilad cannot replace old pipes,
reduce nonrevenue water, and improve supply throughout the West zone
due to limited capital expenditure allotments. Opportunities for
growth were also constrained as the company cannot avail of credit
facilities with lower interest rates and longer payment terms.
With the PSA, Maynilad is set to
settle all loans, most of which have payment terms of up to 2013, as
a requirement to bring the company out of the DCRA.
Meanwhile, the TCA provides that
Maynilad will comply with service targets set under the DCRA until
enhanced service targets are submitted to MWSS-RO come rate rebasing
this last quarter.
“Now I don’t see any reason
why DMCI and MPIC can’t be successful, and their success is what I
want to see soon,” Oscar Garcia, MWSS chairman, said. Garcia also
chaired the Special Bids and Awards Committee, which arranged the
auction of government’s controlling stake in Maynilad late last
year.
Also signing the agreements were
representatives from Bank of America Securities Ltd., Suez
Environment, Goldman Sachs (Asia) Finance, The Asian Debit Fund
Ltd., BNP Paribas, Deutsche Bank AG London, JP Morgan International
Finance Ltd., East West Banking Corp., Merrill Lynch JPNDC Inc. and
Phil. Investment One (SPV-AMC) Inc.
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