A subsidiary of Manila Water Company Inc. in Indonesia failed to get the nod of regulators in its bid to buy a majority stake in Jakarta's PT PAM Lyonnaise Jaya's (PaLyJa).
In a disclosure to the Philippine Stock Exchange, Ayala-led Manila Water said Perusahaan Daerah Air Minum Daerah Khusus Ibukota Jakarta or PAM Jaya, a government entity owned by the province of Jakarta, did not authorize the sale of 51-percent equity in PaLyJa to Manila Water South Asia Holdings Pte. Ltd. (MWSAH), a subsidiary of Manila Water.
"We have been furnished with the letter from PAL Jaya to PaLyJa informing the latter that PAM Jaya did not give its approval to the transfer of Suez Environment equity in PaLyJa to Manila Water South," the disclosure read.
Last October, Manila Water announced it intends to buy more than half of PaLyJa
in a share purchase deal with French utility Suez Environment but subject to government and regulatory approvals in Indonesia.
Forty-nine percent of PaLyJa
is owned by PT Astratel Nusantara, a subsidiary of automotive giant PT Astra International.
PaLyJa operates the water concession for Western Jakarta under a 25-year cooperation agreement with PAM Jaya starting in 1997. The concession accounts for more than 700 million liters per day and 5,300 kilometers of pipe network.
Earlier this year, Manila Water president Gerardo Ablaza Jr. said they intend to expand in "VIP countries" which include Vietnam, Indonesia, and Philippines.
In the first quarter, Manila Water posted a net income of P1.33 billion from P1.34 billion a year earlier despite a 6 percent increase in revenues to P3.64 billion from P3.42 billion. — VS, GMA News