Villar sells PrimeWater; Co Group to take over
PrimeWater Infrastructure Corp. finally found its white knight, with the Lucio Co Group set to take over the troubled water utility business.
The Villar Group made a last-minute confirmation of the circulating news on Tuesday, showing a photo of tycoons Co and Manuel Villar Jr. They were accompanied by their sons, Vincent Co and Manuel Paolo Villar.
Leonardo Dayao, president of Co’s retail holding firm Cosco Capital, was also present.
In a brief statement, PrimeWater said that Crystal Bridges Holding Corp. will acquire 100 percent of PrimeWater after both parties signed definitive agreements, months after the water business suffered from mounting controversies over its alleged poor services.
It did not disclose the transaction value. Earlier on Tuesday, a report surfaced about the acquisition of PrimeWater, quoting Bacolod Rep. Alfredo Abelardo Benitez.
PrimeWater is reportedly involved in a joint venture agreement with the Bacolod City Water District.
Aside from Bacolod, the firm also services parts of Bulacan, Batangas, Laguna, Camarines Norte, Cabanatuan City and Sorsogon City.
Before Co, it was Maynilad Services Inc. that was named as the possible buyer, with billionaire Manuel V. Pangilinan disclosing in November that they had struck a nondisclosure deal to check PrimeWater’s financials.
Asked for his insights, Juan Paolo Colet, managing director at investment bank China Bank Capital Corp., said Co was “making a huge bet on the water utility business.”
“It marks a bold diversification of his business empire. He certainly has the resources and relationships to make this investment work,” he told Inquirer.
Ron Acoba, chief investment strategist at Trading Edge Consultancy, also said this provides growth potential to the Co empire, given that it is “an essential service with largely inelastic demand.”
Walking away from the controversial business can also be a boon for the Villar group, Acoba said.
“By selling PrimeWater, the Villar Group can exit, avoid further potential disputes or government scrutiny, and raise much-needed liquidity,” he told Inquirer in a separate message.
“This cash can then be redeployed to support other core businesses that have been strained by funding or cash flow issues, allowing the group to stabilize and refocus its portfolio on more manageable and profitable sectors,” Acoba said.
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