C01061-2021

SECURITIES AND EXCHANGE COMMISSIONSEC FORM 17-C

CURRENT REPORT UNDER SECTION 17
OF THE SECURITIES REGULATION CODE
AND SRC RULE 17.2(c) THEREUNDER

1. Date of Report (Date of earliest event reported)
Feb 19, 2021
2. SEC Identification Number
A1996-11593
3. BIR Tax Identification No.
005-038-428-000
4. Exact name of issuer as specified in its charter
MANILA WATER COMPANY, INC.
5. Province, country or other jurisdiction of incorporation
QUEZON CITY, PHILIPPINES
6. Industry Classification Code(SEC Use Only)
7. Address of principal office
MWSS ADMINISTRATION BUILDING, 489 KATIPUNAN ROAD, BALARA, QUEZON CITY Postal Code 1105
8. Issuer's telephone number, including area code
(632) 7917 5900 loc. 1404
9. Former name or former address, if changed since last report
N/A
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 2,064,839,617
PREFERRED 4,000,000,000
11. Indicate the item numbers reported herein
-

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 BL-1 - Comprehensive Corporate Disclosure on Backdoor Listing Reference: Rules on Backdoor Listing

Subject of the Disclosure

Comprehensive Corporate Disclosure on Backdoor Listing
Background/Description of the Disclosure

On February 1, 2020, Manila Water and Prime Metroline Holdings, Inc. (the “Subscriber”), signed a Subscription Agreement for the subscription by Prime Metroline Holdings Inc. to 820 million common shares of Manila Water at a price of PHP13 per share. Prime Metroline Holdings Inc., now named Prime Strategic Holdings, Inc., executed the Subscription Agreement for itself and on behalf of a corporation that it will organize to exercise and perform all its rights and obligations as the Subscriber. After their issuance, the 820 million common shares will represent 24.96% economic rights in Manila Water and 11.91% of the total number of outstanding voting shares of stock of Manila Water.

Subsequently, on February 15, 2021, Manila Water, Prime Strategic Holdings, Inc., and Trident Water Company Holdings, Inc. (“Trident Water”) (each a “Party”) signed an Amendment to the Subscription Agreement. Trident Water is a party to the Amendment to the Subscription Agreement as the corporation that Prime Strategic Holdings, Inc. organized to exercise and perform all its rights and obligations as the Subscriber under the Subscription Agreement. In addition to the addition of Trident Water, the Amendment to the Subscription Agreement updated the terms of payment of the subscription price to 50% upon Closing and 50% upon call of Manila Water’s Board of Directors.

On February 15, 2021, Ayala Corporation disclosed that Philwater Holdings Company, Inc. (“Philwater”) and Trident Water executed a Share Purchase Agreement wherein Philwater agrees to sell 2,691,268,205 of its preferred shares in Manila Water Company, Inc. to Trident Water at a price of PHP1.80 per share. The purchase of the preferred shares reflects a 39.09% voting stake and 8.19% economic stake in Manila Water Company, Inc.
Date of Approval by Board of Directors Feb 1, 2020
Date of Approval by Stockholders Apr 17, 2020
Other Relevant Regulatory Agency, if applicable Philippine Competition Commission
Date of Approval by Relevant Regulatory Agency Aug 20, 2020
Date of Approval by Securities and Exchange Commission, if applicable N/A
Comprehensive Corporate Disclosure
The nature and description of the proposed transaction, including the timetable for implementation, and related regulatory requirements if applicable

On February 1, 2020, Manila Water and Prime Metroline Holdings, Inc. (the “Subscriber”), signed a Subscription Agreement for the subscription by Prime Metroline Holdings Inc. to 820 million common shares of Manila Water at a price of PHP13 per share. Prime Metroline Holdings Inc., now named Prime Strategic Holdings, Inc., executed the Subscription Agreement for itself and on behalf of a corporation that it will organize to exercise and perform all its rights and obligations as the Subscriber.

After their issuance, the 820 million common shares will represent 24.96% economic rights in Manila Water and 11.91% of the total number of outstanding voting shares of stock of Manila Water.

On February 15, 2021, Manila Water, Prime Strategic Holdings, Inc., and Trident Water Company Holdings, Inc. (“Trident Water”) (each a “Party”) signed an Amendment to the Subscription Agreement. Trident Water is a party to the Amendment to the Subscription Agreement as the corporation that Prime Strategic Holdings, Inc. organized to exercise and perform all its rights and obligations as the Subscriber under the Subscription Agreement.

Manila Water has not issued, and Trident Water has not acquired, the 820 million common shares subject of the Subscription Agreement pending the completion of the following conditions to closing:
(1) Finalization of the terms and conditions of the Shareholders' Agreement by Ayala Corporation, Philwater Holdings Company, Inc. (“Philwater”), and Subscriber, and
(2) Compliance with and completion of the mandatory tender offer by the Subscriber to the shareholders of Manila Water as may be required by the Securities and Exchange Commission.

Trident Water will initiate the mandatory tender offer after receipt of written approval by the Securities and Exchange Commission. The mandatory tender offer is estimated to be completed by April 2021. The Shareholders’ Agreement will be signed after the completion of the mandatory tender offer.

On February 15, 2021, Ayala Corporation disclosed that Philwater and Trident Water executed a Share Purchase Agreement wherein Philwater agrees to sell 2,691,268,205 of its preferred shares in Manila Water Company, Inc. to Trident Water. The purchase price for the preferred shares shall be PHP1.80 per share, resulting in a total purchase price of PHP4,844,282,769.00. The purchase of the preferred shares reflects a 39.09% voting stake and 8.19% economic stake in Manila Water Company, Inc.
The reason/purpose of the transaction including the benefits which are expected to be accrued to the listed issuer as a result of the transaction

The transaction between Manila Water and the Subscriber 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, through Trident Water, brings with it its expansive global reach and business expertise; with operations in Asia Pacific, Latin America, Middle East and Africa, to Manila Water. The placement will also bring in additional equity capital for Manila Water and is expected to strengthen its balance sheet and allow it to be more agile to pursue its long-term strategic initiatives.
The aggregate value of the consideration, explaining how this is to be satisfied, including the terms of any arrangements for payment on a deferred basis

Under the Subscription Agreement, as amended, the Subscriber has subscribed to 820 million common shares of Manila Water. The consideration for this subscription is PHP13 per share, resulting in a total subscription price of PHP10,660,000,000.00 (the “Subscription Price”), which shall be paid as follows:
(1) PHP5,330,000,000.00, representing 50% of the Subscription Price, will be paid on Closing, and
(2) PHP5,330,000,000.00, representing the balance of the Subscription Price, shall be paid upon call by the Board of Directors.

Under the Share Purchase Agreement, Philwater has agreed to sell 2,691,268,205 of its preferred shares in Manila Water Company, Inc. to Trident Water. The purchase price for the preferred shares shall be PHP1.80 per share, resulting in a total purchase price of PHP4,844,282,769.00. The payment terms are as follows:
(1) PHP100 million payable on or before three business days from signing,
(2) PHP2.37 billion payable on or before 4 years from the execution of the Share Purchase Agreement, and
(3) the remaining balance of PHP2.37 billion payable on or before 5 years from the execution of the Share Purchase Agreement.

The rights and title to the shares, except voting rights covered by the proxies, which shall be executed upon the execution of the Shareholders’ Agreement, shall not be transferred until all payments are made. Dividends earned by the preferred shares shall continue to be for the account of Philwater until full payment has been made.
The basis upon which the consideration or the issue value was determined

At the time of the execution of the Subscription Agreement on February 1, 2020, the Subscription Price is higher than 30 day up to 1-year volume weighted average price of Manila Water stock, thus ensuring a fair recognition of the interests of its existing shareholders.

VWAP (Period)
30 Trading Days - PHP8.95 (12/12/2019 - 01/30/2020)
60 Trading Days - PHP9.38 (10/30/2019 - 01/30/2020)
90 Trading Days - PHP 9.77 (09/18/2019 - 01/30/2020)
1 Year - PHP12.03 (01/31/2019 - 01/30/2020)

The sale of the 2,691,268,205 preferred shares underlying the Voting Proxies was priced at PHP1.80 per share by Philwater to Trident Water. The par value of each preferred share is 1/10th the par value of each common share. The preferred shares were priced based on the market price of the common shares, with negotiations providing for adjustments for their nature as participating, cumulative preferred shares as well as the control premium.
For cash considerations, the detailed work program of the application of proceeds, the corresponding timetable of disbursements and status of each project included in the work program. For debt retirement application, state which projects were financed by debt being retired, the project cost, amount of project financed by debt and financing sources for the remaining cost of the project

The detailed work program and timetable of disbursements will be finalized by Manila Water prior to the financial closing of the Subscription Agreement.
The listed company must present a statement of active business pursuits and objectives which details the steps undertaken and proposed to be undertaken by the Issuer in order to advance its business

Please see attached document - MWC Statement of Active Business Pursuits and Objectives.

Effects in the listed company before and after the transaction on the following:

Increase in authorized capital stock
From 3,500,000,000
To 3,500,000,000
Nature of business
From To construct, possess, use, operate, manage, maintain, rehabilitate, remove, repair, improve and expand such waterworks, waste waterworks and treatment facilities
To To construct, possess, use, operate, manage, maintain, rehabilitate, remove, repair, improve and expand such waterworks, waste waterworks and treatment facilities
Corporate Name
From Manila Water Company, Inc.
To Manila Water Company, Inc.
Board of Directors
Name (Regular or Independent)
Fernando Zobel de Ayala Regular
Jaime Augusto Zobel de Ayala Regular
Jose Rene Gregory D. Almendras Regular
Antonino T. Aquino Regular
Gerardo C. Ablaza, Jr. Regular
Delfin L. Lazaro Regular
John Eric T. Francia Regular
Oscar S. Reyes Independent
Jaime C. Laya Independent
Sherisa P. Nuesa Independent
Jose L. Cuisia, Jr. Independent
Principal Officers
Name Position/Designation
Fernando Zobel de Ayala Chairman
Jaime Augusto Zobel de Ayala Vice Chairman
Jose Rene Gregory D. Almendras President and Chief Executive Officer
Ma. Cecilia T. Cruzabra Chief Finance Officer, Treasurer, Compliance Officer, Chief Risk Officer, and Group Director for Corporate Finance and Strategy
Abelardo P. Basilio Chief Operating Officer for Manila Water Operations
Virgilio C. Rivera, Jr. Chief Operating Officer for New Business Operations
Solomon M. Hermosura Corporate Secretary
Liwayway T. Sevalla Chief Information Officer and Data Protection Officer
Janine T. Carreon Group Director for Corporate Human Resources
Esmeralda R Quines Group Director for East Zone Business Operations
Maidy Lynne B. Quinto Group Director for Subsidiary Operations
Arnold Jether A. Mortera Group Director for Corporate Operations
Robert Michael N. Baffrey Group Director for Corporate Project Management
Evangeline M. Clemente Group Director for Strategic Asset Management concurrent Group Director for Strategic Procurement and Supply Chain
Gerardo M. Lobo II Assistant Corporate Secretary
Rolando V. Caraig Chief Audit Executive
Mark Tom Q. Mulingbayan Chief Sustainability Officer
Ownership structure
Principal Shareholders Before After
Number of shares % Number of shares %
Public 1,197,893,421 58.01% 1,197,893,421 41.52%
Ayala Corporation 866,946,196 41.99% 866,946,196 30.05%
Trident Water Company Holdings, Inc. 0 0 820,000,000 28.42%

Capital structure

Issued Shares
Type of Security /Stock Symbol Before After
Common/MWC 2,064,839,617 2,884,839,617
Preferred 4,000,000,000 4,000,000,000
Outstanding Shares
Type of Security /Stock Symbol Before After
Common/MWC 2,064,839,617 2,884,839,617
Preferred 4,000,000,000 4,000,000,000
Treasury Shares
Type of Security /Stock Symbol Before After
N/A - -
Listed Shares
Type of Security /Stock Symbol Before After
Common/MWC 2,027,238,060 2,847,238,060
Effect(s) on the public float, if any Public float will decrease from 55.87% to 39.99% (based on Public Ownership Report as of December 31, 2020), excluding the 4,000,000,000 preferred shares.
Effect(s) on foreign ownership level, if any Foreign ownership will decrease from 8.38% to 7.38% (based on Foreign and Local Ownership Monitoring Report as of January 31, 2021).
Additional information on the unlisted company
Nature and business

Please see attached document - Articles of Incorporation of Trident Water Company Holdings, Inc.
Discussion of major projects and investments

Trident Water will be the company which will hold the investment in Manila Water, as well as other future projects in the distribution and treatment of water and wastewater.

On the other hand, Prime Strategic Holdings, Inc. owns Prime Infrastructure Capital which is undertaking the Tayabasan Weir System and Upper Wawa Dam (“Wawa Bulk Water Project”). Said project will supply raw water to the Metropolitan Waterworks and Sewerage System (MWSS) and its concessionaires for their treatment and distribution to end users and customers. With a capacity of 518 million liters per day (MLD), the Wawa Bulk Water Project is aimed at securing Manila Water, the East Zone Concessionaire of the Metropolitan Waterworks and Sewerage System (MWSS), water supply requirement in the near and medium terms. The bulk water project is expected to boost Manila Water’s water supply availability by more than 30% of its current water supply allocation from Angat Dam of 1,600 MLD.

In addition to water security, the Wawa Bulk Water Supply Project accelerates water availability in the East Zone. A Tayabasan Weir System is expected to deliver first water of 80 MLD, while the full capacity of 518 MLD by 2025 will be made available once the Upper Wawa Dam is completed. As such, the project is deemed to be one of the fastest and most sustainable water supply sources that is strategically located within the MWSS service area.

By interconnecting the project to Manila Water’s main transmission highway, via the Calawis Treatment Plant and transmission system, the East Zone Concessionaire will gain operational efficiency and reliability to bring water where it is needed most.
List of subsidiaries and affiliates, with percentage holdings
Name of Subsidiary or Affiliate % Ownership
None. -

Capital structure

Authorized capital stock
Type of Security Amount Number of Shares
COMMON PHP75,000,000.00 75,000,000
PREFERRED PHP25,000,000.00 250,000,000
Subscribed Shares
Type of Security Amount Number of Shares
COMMON PHP5,000,003.00 5,000,003
PREFERRED PHP20,000,000.00 200,000,000
Paid-Up Capital
Amount PHP6,250,000.00
Number of Shares 205,000,003
Issued Shares
Type of Security Amount Number of Shares
COMMON PHP5,000,003.00 5,000,003
PREFERRED PHP20,000,000.00 200,000,000
Outstanding Shares
Type of Security Amount Number of Shares
COMMON PHP5,000,003.00 5,000,003
PREFERRED PHP20,000,000.00 200,000,000
Par Value
Type of Security Amount
COMMON PHP1.00
PREFERRED PHP0.10
Ownership Structure (including percentage holdings)
Name Number of Shares % Ownership
Prime Strategic Holdings, Inc. 5,000,000 20%
Prime Strategic Holdings, Inc. (Preferred Shares) 200,000,000 80%
Enrique K. Razon, Jr. 1 0
Rafael D. Consing, Jr. 1 0
Silverio Benny J. Tan 1 0
Board of Directors
Name (Regular or Independent)
Enrique K. Razon, Jr. Regular
Rafael D. Consing, Jr. Regular
Silverio Benny J. Tan Regular
Principal Officers
Name Position/Designation
Rafael D. Consing, Jr. Treasurer-in-Trust
The interest which the directors of the parties to the transaction have in the transaction

None.
Statement as to the steps to be taken, if any, to safeguard the interests of the shareholders

The Subscription Agreement is among the corporate acts ratified by the stockholders of Manila Water Company, Inc. during its annual stockholders’ meeting held on April 17, 2020.
Other Relevant Information

[ PART 2 OF 2 ]

On February 1, 2020, the Executive Committee of Manila Water authorized Manila Water to enter into a subscription agreement with Prime Metroline Holdings, Inc. (for itself and on behalf of a corporation that it will organize for the transaction) for subscription to 820 million common shares of Manila Water at PHP13.00/share or a total subscription price of PHP10,660,000,000.00. On February 20, 2020, the Board of Directors of Manila Water ratified the Executive Committee’s approval of the execution of the subscription agreement. Further, the Subscription Agreement is among the corporate acts ratified by the stockholders of Manila Water during its annual stockholders’ meeting held on April 17, 2020.

On February 15, 2021, the Executive Committee of Manila Water authorized Manila Water to enter into an Amendment to the Subscription Agreement with Prime Strategic Holdings, Inc. (formerly, Prime Metroline Holdings, Inc.) and its subsidiary, Trident Water Company Holdings, Inc.

The Comprehensive Corporate Disclosure is submitted in two parts and with the following documents:
PART 1:
1. Subscription Agreement dated February 1, 2020 and the Amendment to the Subscription Agreement
2. Share Purchase Agreement dated February 15, 2021
3.MWC Statement of Active Business Pursuits and Objectives
4. Resulting Ownership Structure of Manila Water after closing of Trident Water’s subscription to 820 million common shares and purchase of 2,691,268,205 preferred shares
5. Amended Articles of Incorporation and 2020 General Information Statement of Prime Strategic Holdings, Inc.

PART 2:
1.2019 Audited Financial Statements of Prime Strategic Holdings, Inc. (formerly, Prime Metroline Holdings, Inc.)
2.2018 Audited Financial Statements of Prime Strategic Holdings, Inc. (formerly, Prime Metroline Holdings, Inc.)
3.2017 Audited Financial Statements of Prime Strategic Holdings, Inc. (formerly, Prime Metroline Holdings, Inc.)
4. Articles of Incorporation of Trident Water Company Holdings, Inc.
5. 2020 Unaudited Financial Statements of Trident Water Company Holdings, Inc.

Trident Water has been incorporated on March 3, 2020 and has yet to submit its 2020 Audited Financial Statements.

Further, the Subscription Agreement states that the following are conditions precedent to Closing:
(1) Subscriber shall have completed the Due Diligence Audit, the results thereof being reasonably satisfactory to Subscriber;
(2) MWC shall have obtained approval from its Board of Directors and at least 2/3 of its stockholders on the amendment of its Articles of Incorporation to increase (i) to Nine Hundred Million the number of unissued common shares being carved out from pre-emptive rights of existing MWC stockholders, and/or (ii) its authorized capital stock;
(3) MWC shall have obtained approval from the SEC on the amendment of its Articles of Incorporation;
(4) MWC shall have filed the relevant notice with the SEC (using SEC Form 10-1) regarding the Subscription as an exempt transaction from registration requirements under the Securities Regulation Code, as amended;
(5) Parties shall have notified the Philippine Competition Commission of this Agreement and shall have secured confirmation that the Subscription is not violative of competition laws, if needed;
(6) MWC shall have obtained the relevant third-party consents required for the Subscription;
(7) Parties shall have caused PHC, AC and Subscriber to finalize the terms and conditions of the Shareholders' Agreement;
(8) Subscriber shall have complied with and completed the mandatory tender offer to the shareholders of MWC as maybe required by the SEC; and
(9) All the representations and warranties of the Parties are true and complete as of Closing Date.
Filed on behalf by:
Name Romelyn Obligacion
Designation Senior Legal Counsel