DITO CME, the listed operator of DITO Telecommunity, the venture between Uy’s Udenna Group and China Telecom, said on Monday its board approved a “potential investment” by shareholder Summit Telco Corp. Pte. Ltd.
This new deal involves the issuance of up to nine billion new shares to Summit—equivalent to almost one-third of DITO CME’s expanded capital—which will reduce the effective ownership of all other stockholders.
Uy, the chair of DITO, and president Donald Patrick L. Lim were authorized to negotiate details of the prospective deal including the terms, amounts, timing, and tranches, and to sign necessary agreements.
Udenna, which owned just below 55 percent of DITO CME before the issuance, could see its ownership fall to about a third of the company. The Singapore-registered Summit Group, which owns about 25 percent of DITO CME, will own almost half of the listed holding company.
Big picture
DITO CME needs fresh funding to help wipe out a capital shortfall of about P44 billion as of last August.
Summit Telco Holdings Corp. and Summit Telco Corp. Pte. Ltd. stepped in to provide funding with the purchase of DITO CME shares last year at P1 each.
DITO CME, which has yet to detail who controls these funds, said on Monday the issuance is part of its “business plan to improve its equity position.”
Uy's Udenna sells another key asset
From casinos, energy and food, Uy's Group has been reducing assets to lower its debt obligations.
It sold 2GO Group to Sy-led SM Investments and also unloaded Wendy's Philippines and Conti's earlier this year.
Uy's PH Resorts Group Holdings is also in talks to sell its $300 million Emerald Bay casino project, which remains unfinished.
What this means for DITOTel?
A company insider stated that no major changes are expected, and the telecommunications unit remains focused on achieving profitability by 2028.
“The team is vigorously working on the telco’s continued high growth, to get it to financial stability,” the executive said.
Stalled offer
Last September, DITO CME postponed its follow-on offering of up to 1.95 billion shares, initially scheduled for Sept. 26 to Oct. 2, 2024, due to investor requests for more evaluation time.
DITO Telecommunity, which recently breached the 13-million subscriber market, earlier surpassed its network targets in its fifth and final technical audit, completing a five-year commitment as the country’s third major telco.
Independent auditor R.G. Manabat & Co. confirmed DITO’s 86.3 percent population coverage, with average internet speeds of 92.87 Mbps on 4G and 597.7 Mbps on 5G, as reported to the National Telecommunications Commission on Sept. 17, 2024.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.
