MANILA, Dec 17 (Reuters) - Shares in Manila Water Co Inc tumbled 39% to a 14-year low on Tuesday, even as the Philippine utility firm sought to ease investor concerns over its concession deals following legal disputes with the government.
The Philippines’ water regulators said last week it has cancelled the 15-year extension of concession deals it signed with Manila Water and unlisted Maynilad Water, the country’s two largest utilities, after pressure from President Rodrigo Duterte.
The firebrand leader described the concession agreements as “onerous and disadvantageous” to the public, after the two firms won arbitration cases in Singapore, which ordered the Philippine government to pay the utilities a combined $212 million in compensation.
Water regulators said on Tuesday the government plans to form a new concession deal and also revise its penalty system, a day after Manila Water said it was willing to negotiate with the government and find a mutually acceptable solution.
“We... want to improve the mechanism for fines and penalties. All of these are to further protect the interest of the public,” Patrick Ty, chief regulator of the Metropolitan Waterworks and Sewerage System, told Reuters.
Shares in Manila Water, which serves seven million customers mainly in the capital, slumped as much as 39% on Tuesday to their lowest in more than 14 years.
It has dropped by nearly 70% in two weeks, losing $450 million in market value, since Duterte ordered the filing of criminal charges against the water utilities and their billionaire owners on Dec. 4.
Shares in conglomerate Ayala Corp, which owns Manila Water, dropped 1.9% to a near three-year low, widening its 2-week loss to $1.14 billion.
DMCI Holdings Inc and Metro Pacific Investments Corp, both shareholders of Maynilad, also lost around $150 million and $420 million in their market value, respectively, in the same period.
The companies had said they would forfeit any damage claims to avoid angering the president who enjoys high public approval ratings, thanks to his man-of-the-people style.
$1 = 50.91 Philippine pesos Reporting by Neil Jerome Morales; Editing by Arun Koyyur