9. Former name or former address, if changed since last report
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10. Securities registered pursuant to Sections 8 and 12 of the SRC or Sections 4 and 8 of the RSA
Title of Each Class
Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding
Common Shares
2,053,945,884
11. Indicate the item numbers reported herein
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The Exchange does not warrant and holds no responsibility for the veracity of the facts and representations contained in all corporate disclosures, including financial reports. All data contained herein are prepared and submitted by the disclosing party to the Exchange, and are disseminated solely for purposes of information. Any questions on the data contained herein should be addressed directly to the Corporate Information Officer of the disclosing party.
Manila Water Company, Inc.MWC
PSE Disclosure Form 4-22 - Joint Ventures References: SRC Rule 17 (SEC Form 17-C) and Section 4.4 of the Revised Disclosure Rules
Subject of the Disclosure
Joint Venture Agreement between Obando Water Consortium Holdings Corp. (“Obando Holdings”) and Obando Water District ("OWD")
Background/Description of the Disclosure
In relation to our disclosure dated January 24, 2017, Obando Water Consortium Holdings Corp. (“Obando Holdings”) has signed and executed a Joint Venture Agreement with the Obando Water District ("OWD") on August 23, 2017.
Obando Holdings is a consortium of Manila Water Company, Inc. ("Manila Water") and Manila Water Philippine Ventures, Inc. (“MWPV) with Manila Water and MWPV owning 49% and 51% respectively of the issued and outstanding capital stock of Obando Holdings. MWPV is a wholly-owned subsidiary of Manila Water.
Date of Approval by Board of Directors
Feb 17, 2017
Date of Approval by Stockholders, if applicable
N/A
Description and nature of the transaction including the timetable for implementation, and related regulatory requirements
The Joint Venture Agreement (“JVA”) governs the relationship of Obando Holdings and OWD as joint venture partners in the Obando Water Concession Project (the “Project”).
Under the said JVA, Obando Holdings and the OWD shall cause the incorporation of a Joint Venture Company (“JVC”) which will implement the concession project for the design, construction, rehabilitation, operation, maintenance, financing, expansion and management of water facilities and the provision of water and sanitation services in the Municipality of Obando. Obando Holdings will own 90% while OWD will own 10% of the JVC’s outstanding capital stock.
For the implementation of the Project, OWD and the JVC shall execute a Concession Agreement.
Rationale for the transaction including the benefits which are expected to be accrued to the Issuer as a result of the transaction
The JVA, the Parties affirms the intention of the Parties therein, that is, Obando Holdings and OWD, to establish a JVC which shall be granted a concession by OWD for the design, construction, rehabilitation, operation, maintenance, financing, expansion and management of water facilities and the provision of water and sanitation services of OWD in the Municipality of Obando.
The Project was initiated in accordance with and pursuant to the 2013 Revised Guidelines and Procedures For Entering Into Joint Venture (JV) Agreements Between Government and Private Entities that permits to form joint ventures with private sector entities.
The Project is pursuant to and consistent with, Manila Water Group’s objective to further bring its expertise in water and used water services outside of the Manila Concession by establishing partnerships with private companies, local water districts and local government units in the top metros of the country and in selected cities in the Asian region. In this regard, various water business models, such as concession projects, NRW reduction, bulk water supply arrangements, and operations and maintenance projects are being explored and consequently implemented. Towards this end, the Manila Water Group has been pursuing joint venture agreements and/or investment agreements with local and international partners, such as the subject JVA with OWD.
Terms and conditions of the joint venture
Amount of investment and/or interest by the parties involved
The JVC shall have an outstanding capital stock of PhP 98 million divided into Ninety Eight Million (98,000,000) common shares with a par value of One Peso (PhP 1.00) per share, and the Parties shall subscribe in cash and property to the authorized capital stock of the JVC.
In particular, Obando Holdings shall subscribe to 90% of the outstanding capital stock of the JVC in the total amount of PhP 88.2 million and OWD shall subscribe to 10% of the outstanding capital stock of the JVC in the total amount of PhP 9.8 million.
Provisions on profit-sharing, arrangements on management and operations
Profits, losses and dividends shall be determined based on the shareholdings of the Parties.
A Board of Directors consisting of five (5) directors shall manage the JVC. Obando Holdings shall nominate four (4) directors, including the Chairman of the Board, and OWD shall nominate one (1) director of the JVC. Each of the Parties agrees to vote in favor of all the directors so nominated.
Conditions precedent to closing of transaction, if any
The conditions precedent for the execution of the JVA are as follows:
a) The Parties shall have obtained the necessary approvals to enter into the JVA. b) OWD shall have obtained an opinion from the Office of the Government Corporate Counsel concerning the validity, enforceability, due execution and legal compliance of the JVA. c) Obando Holdings shall have posted a performance security in favor of OWD in any of the prescribed forms and amounts in the JVA.
Other salient features of the joint venture agreement
The JVC shall perform the following functions:
a) Use the OWD assets and infrastructure for the performance of its obligations. b) Perform the services required under the Concession Agreement, generally, the operation, maintenance and expansion of and the provision of water and sanitation services of OWD. c) Raise financing for the improvement and expansion of the OWD facilities and to enable it to comply with its service obligations under the Concession Agreement. d) Comply with all laws, rules, and regulations pertaining to the supply of water services within the territorial jurisdiction of the OWD. e) Subject itself to regulation by the OWD pursuant to the Concession Agreement.
Identity and/or corporate background of the parties to the transaction, including the following
Name
Nature of Business
Nature of any material relationship with the Issuer, their directors/officers or any of their affiliates
Obando Water Consortium Holdings Corp. ("Obando Holdings")
Obando Holdings is established as a holding company to hold shares in the JVC, pursuant to and in accordance with the bidding documents for the Project. Under the JVA, it shall provide the technical expertise for the implementation of the Project and shall provide project management guidance and assistance to the JVC for the implementation of the Project.
Obando Holdings is a consortium of Manila Water and MWPV with Manila Water and MWPV owning 49% and 51% respectively of the issued and outstanding capital stock of Obando Holdings.
Obando Water District ("OWD")
Please refer to other relevant information
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Effect(s) on the business, financial condition and operations of the Issuer, if any
The Project will promote Manila Water Group’s objective to further bring its expertise in water and used water services outside of the Manila Concession by establishing partnerships with private companies, local water districts and local government units in the top metros of the country and in selected cities in the Asian region.
Other Relevant Information
This was approved by the Board of Directors of Obando Holdings on February 17, 2017 (provided "Date of Approval by the Board of Directors").
OWD is a water district created and existing by virtue of Presidential Decree No. 198, as amended, for the purpose of “(a) acquiring, installing, improving, maintaining and operating water supply and distribution systems for domestic, industrial, municipal and agricultural uses for residents and lands within the boundaries of such districts, (b) providing, maintaining and operating wastewater collection, treatment and disposal facilities, and (c) conducting such other functions and operations incidental to water resource development, utilization and disposal within such districts, as are necessary or incidental to said purpose”.
Manila Water Company, Inc.MWC