By Beting Laygo Dolor, Contributing Editor
Billionaire Enrique Razon took a 51 percent controlling stake in Manila Water last week, potentially easing the pressure exerted by President Rodrigo Duterte on the Ayala family.
Razon initially bought a 25 percent stake in the company for PHP10.7 billion (about US$214 million) but continued to purchase shares of stock with the announced intention of taking majority control of the firm that supplies water to half of Metro Manila.
Razon’s entry is seen to spare the Ayalas from continued attacks from the President, who has accused siblings Fernando and Jaime Augusto Zobel de Ayala of “syndicated estafa.”
The Ayalas will keep a minority stake in the company, which is listed in the Philippine Stock Exchange.
Until surrendering control of the company, Manila Water had been inching up as one of the flagship companies of the Ayala Group of Companies, which includes such profit centers as Globe Telecom, Bank of the Philippine Islands and Ayala Land.
Employees of Manila Water were reportedly concerned that with the new majority stockholder at the helm, they would lose some of the benefits they enjoyed as part of the Ayala Group. But some expressed relief that with Razon in charge, President Duterte would no longer exert pressure in the company.
Duterte had said on several occasions that he would order a review of the concession agreement signed between the Metropolitan Waterworks and Sewerage System (MWSS) representing the government, on one hand, and Manila Water and Maynilad of the Manuel V. Pangilinan (MVP) Group, on the other.
The President has even said that he would have the military take over operations of the two water firms, if they did not provide better service.
Allies of the President even suggested that the owners sell their companies.
While MVP said his water company was not for sale, the Ayala Group only said that they planned to raise PHP9 billion through a share sale. The entry of Razon was announced shortly thereafter.
The stock market which had been reeling from the effects of the coronavirus scare welcomed the development.
The Razon camp is said to be keeping almost all the executives and employees of the company.
It was not immediately clear what the effects of the new ownership will bring in terms of employee benefits. The Ayala Group had earned a reputation over the decades of taking better care of its employees than the typical private Filipino companies.
Benefits in Ayala companies were even comparable to multi-national corporations which offer a full range of medical, dental and retirement benefits, as well as bonuses above and beyond the mandated 13th month pay.
While generally avoiding partisan politics, the Ayalas have been known to support the presidencies of the late Cory Aquino and Benigno ‘Noynoy’ Aquino.
The Ayala group has been in existence for more than a century and is considered as the Philippines’ first international conglomerate. The family is credited with turning the former sleepy town of Makati into the Philippines’ business center.
Known for turning the International Container Terminal Services, Inc. (ICTSI) into a global operator, as well as heading Solaire Resort Casino Hotel, Razon has also been investing in utilities, of late. He recently took control of the power firm supplying electricity to Iloilo City.
The Spanish-Filipino Razon is known as a pure businessman who prefers to keep in the background. The ports and casino billionaire turns 60 this year.
His father was the founder of ICTSI, which had been operating the main ports of Manila for decades. When Razon took over, he expanded globally, operating ports in such places as Vietnam and South America.
He reportedly learned the ropes from the ground up, working as laborer in the ports during school breaks.