The construction-based group DMCI Holdings Inc. said its shareholding in the investment company that controls the water concessionaire Maynilad Water Services Inc. would be reduced to 44 percent from 50 percent as a result of debt-to-equity conversion.

To be converted into equity is a $40-million loan from London-based fund manager Ashmore Investment Management Ltd. and Hong Kong-based conglomerate First Pacific Co. Ltd., parent firm of Metro Pacific Investments Corp. (MPIC), DMCI’s partner in the investment firm DMCI-MPIC Water Co.

DMCI-MPIC Water won the operation of Maynilad’s water concession in the western zone of Metro Manila and some nearby areas in 2006, for $197 million.

MPIC will buy the shareholdings of Ashmore and First Pacific in DMCI-MPIC Water. It will end up with a 55-56 percent interest.

DMCI vice president and chief finance officer Herbert Consunji said the company had decided it was not prudent for it to increase its capital in Maynilad.

Maynilad recorded revenue of P8 billion from the sale of 287 million cubic meters of potable water and services in 2007, up nine percent from 2006. The volume increased but revenue was affected by a drop in Maynilad’s average tariff that reflected the strengthening of the peso.

Maynilad reduced its “non-revenue water”—water lost to leaks and pilferage—to 66 percent last year from 68 percent in 2006.

It has 703,519 service connections, or about six million consumers. It improved its service level for 24-hour water availability to 50 percent in 2007 from 30 percent in 2006. The company is targeting 65 percent by the end of the year. Edited by INQUIRER.net