Lopez Holdings

 

Lopez: Maynilad reorg is no bailoutOscar M. Lopez, chairman of Benpres Holdings Corporation, firmly denied any --˜bailout' by government in Maynilad Water Services, Inc.

"How can it be a bailout when the Lopez Group is completely writing off its equity investment of US$ 80 million? If there was a political deal with the government, how come in addition to our loss in Maynilad, Meralco's rates have remained unadjusted?" Lopez asked.

"It is pathetic that other vested interests have taken advantage of the election campaign season by injecting politics into purely business decisions, and in the process demonizing the Lopez family. Even the matter of an ABS-CBN talent like Dolphy, which is a purely show business concern, is being given political color. What a cheap political stunt," said Lopez.

Lopez pointed out that the MWSS-Maynilad agreement took months to hammer out and involved not just Benpres but over 20 creditor banks. In addition, the agreement must still be approved by the receiver and the court.

Lopez said his family has too often been made convenient whipping boys for their participation in utilities. "We have too seldom been recognized for the good that we have done. We are proud to have accomplished much in Maynilad in the last six and a half years. We are not leaving a desolate and financially unsound company as the misinformed wish to believe, and definitely there was no mismanagement of the water utility," he said.

Lopez said Maynilad could have taken the course of pursuing the rehabilitation case in court that could have dragged for years. But this would have risked the quality of water service delivery to more than one-half of Metro Manila's population. Instead, Maynilad agreed to reorganize to address both government and creditor issues, at the sacrifice of shareholder interest.

Maynilad's sustainability as a business enterprise had been substantially eroded by huge foreign exchange losses and the utility's difficulty in getting realistic tariff rates that would reflect the true cost of delivering potable water to its customers. The write-off of shareholder equity eliminated Maynilad's accumulated losses and gave a level of protection to consumers from what would otherwise have been drastic increases in tariff rates going forward.

In addition to writing off Benpres's equity investment to put Maynilad on healthy financial footing, Lopez said Maynilad had improved water service in the West Zone, as follows:

Paid more than US0 million out of US0 million in concession loans assumed from MWSS, before stopping payments in 2001;

  1. Implemented P4.3 billion in capital projects
  2. Connected 194,098 new consumers to the network, 74,266 of them among the urban poor through its ground-breaking
  3. BayanTubig program; water service connections as of end-2003 numbered 585,989
  4. Improved coverage to 85% of the population from 63%

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Lopez Holdings Corporation 
16/F North Tower, Rockwell Business Center Sheridan, Sheridan St. corner United St., 1550 Bgy. Highway Hills, Mandaluyong City, Philippines

  • Trunkline: (632) 8878 0000
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