Stock - Manila
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Maynilad Water Services Inc. is considering raising about $300 million in a funding round before a potential initial public offering that could take place as soon as 2025, according to people with knowledge of the matter.

HSBC Holdings Plc has been picked to assist with the pre-IPO round to sell less than 10% of the company's equity, the people said. HSBC has also been tapped with Morgan Stanley for the possible first-time share sale in Manila, said the people, asking not to be identified as the process is private.

Maynilad is seeking a valuation of $3 billion to $4 billion in the potential IPO, the people said, with one adding that the company will be legally required to sell 30% of its shares to the public by the start of 2027. That deadline relates to a franchise agreement signed with the government in 2021.

If the pre-IPO round proceeds, Maynilad would reduce the size of its IPO to between $500 million and $700 million from an initial target of $750 million to $1 billion, the people said. Deliberations are ongoing and details such as the size of the offering and banks involved could change, the people said.

Maynilad President and Chief Executive Officer Ramoncito Fernandez, responding to a query from Bloomberg News, said the company regularly raises funds to finance its expansion. He said it is "too early to specify" any fundraising amount.

HSBC didn't respond to a request for comment and representatives for Morgan Stanley declined to comment.

Bloomberg reported in September that Maynilad was evaluating proposals from financial advisers and planning a listing in 2025. Fernandez also told a local daily that an IPO would need to take place within about three years.

A first-time share sale could boost the IPO market in Manila, which hosted just three listings in 2023, raising $72 million, compared with $315 million in 2022, according to data compiled by Bloomberg. Only Citicore Renewable Energy Corp. has filed for a listing in the Philippines so far this year, with its debut expected on March 22.

Quezon City-based Maynilad was founded in 1997. DMCI-MPIC Water Co., a joint venture between Metro Pacific Investments Corp. and DMCI Holdings Inc., took control of the company in 2007, according to Maynilad's website. Six years later, Japan's Marubeni Corp. bought a 20% stake in DMCI-MPIC and became a strategic partner.

Maynilad says it provides water and wastewater services in Greater Manila, operating about 7,500 kilometers (4,660 miles) of pipelines.