Photo from the Manila Water Co. website.

Businessman Enrique Razon barged into the water sector amid a dispute between the government and Metro Manila’s two water concessionaires, acquiring a 25-percent stake in the Ayala Corp.-led Manila Water Co. Inc. for P10.7 billion.

Manila Water said Razon, who has port concessions in 18 countries, was entering as a strategic investor, and his capital infusion would allow the company to strengthen domestic and overseas operations.

Razon’s Prime Metroline Holdings Inc., on behalf of a soon-to-be-formed corporation, subscribed to 820 million common shares of Manila Water at a price of P13 per share, Manila Water said.

“The entry of Prime, which is led by businessman Enrique Razon Jr., as a strategic investor to Manila Water is expected to bolster Manila Water’s ability to provide reliable, efficient and sustainable water and wastewater services in the East Zone and at the same time pursue growth initiatives both domestically and globally. The Razon group brings with it its expansive global reach and business expertise; with operations in Asia Pacific, Latin America, Middle East and Africa, to Manila Water,” it said.

“The placement brings P10.7 billion in additional equity capital for Manila Water and is expected to strengthen the Company’s balance sheet and allow it to be more agile to pursue its long-term strategic initiatives,” it added.

Fernando Zobel de Ayala, Manila Water chairman, said: “Our partnership combines our respective technical and management expertise. Looking beyond our domestic businesses, the extensive global experience of Mr. Razon through his port operations opens more opportunities for Manila Water to serve new markets.”

On Tuesday, Manila Water said the Ayala group would remain in control of the company despite Razon’s sudden entry.

“Ayala Corporation remains as the biggest shareholder of Manila Water, with a 38.6% economic stake and we are not aware of any plan or arrangement that will change the ownership of Manila Water other than as set forth in our Subscription Agreement with Prime Metroline Holdings, Inc.,” it told the stock exchange following a report by the Philippine Daily Inquirer that Razon would eventually gain management control.

In December, President Rodrigo Duterte threatened to sue Manila Water, holder of the east zone concession, and west zone operator Maynilad Water Services Inc. if they insisted on enforcing P11 billion in arbitration claims over a rate-setting dispute.

Both companies later said they would no longer pursue the awards, which were supposed to cover losses they claimed to have incurred after water rates were frozen way back in 2015.

Duterte called for a review of the concession deals, arguing that the contracts awarded to Manila Water and Maynilad in 1997 were onerous as the deals allowed the two firms to charge their income tax payments on consumers, as well as guaranteed their profits. Water, he also argued, was treated as a commodity and not a natural resource owned by the state. (