MANILA -- Billionaire Enrique Razon acquired 25 percent of Manila Water, bringing P10.7 billion in fresh funding to the utility that has come under government scrutiny, parent Ayala Corp said Monday.

Ayala Corp said it would retain a 38.6-percent stake in Manila Water, which supplies water to the Philippine capital's east zone. Razon-led Prime Metroline Holdings will form a company, Trident Water, for the transaction.

Razon is acquiring 820 million common shares at 13 pesos apiece, Manila Water said in a disclosure to the stock exchange before the start of trading.

"It should be a confidence booster for the water companies," COL financial analyst April Lee Tan told ANC's Market Edge.

Razon's entry eases fears that Manila Water's concession would not be renewed, Tan said.

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"Both Ayala and Mr. Razon share a deep commitment to contributing to the country’s water infrastructure development,” Ayala Corp Chairman and CEO Jaime Augusto Zobel de Ayala said.

Razon said the partnership with the Ayalas would "further develop this unique business both here in the Philippines and abroad."

"We are confident that our collective experience, technical capabilities, and corporate synergies will be of great benefit to Manila Water, the people it serves, and its other stakeholders," said Razon.

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Ayala Corp President and COO Fernando Zobel de Ayala said Manila Water would leverage on Razon's experience on overseas operations to expand Manila Water to Southeast Asia.

Razon is buying into Manila Water as its contract to supply water to Metro Manila's east zone is being renegotiated. President Rodrigo Duterte tagged the deal as "onerous" late last year, citing an international arbitration court's ruling for Manila to pay Manila water P7.4 billion. Manila Water dropped the claim.

Last year, Manila Water grappled with a water shortage that brought weeks of rationing to tens of thousands in the capital.

Aside from Manila Water, government officials have flagged alleged irregularities in the lease agreement between Ayala Land and the University of the Philippines for the Technohub IT park in Quezon City. The Ayalas denied wrongdoing.