mango win Singapore firm poised to take control of DITO CME
mango win Singapore firm poised to take control of DITO CME
Dennis Uy
Singaporean firm Summit Telco Corporation Pte. Ltd has struck a deal to acquire an additional 9 billion shares—currently valued at P17.1 billion—in DITO CME Holdings Corp., operator of DITO Telecommunity (DITO Tel).
Once finalized, Summit will emerge as the largest shareholder in the company built by Davao-based businessman Dennis Uy.
Article continues after this advertisementAt present, Summit Telco already has an 8.14-percent stake in the company while its parent Summit Telco Holdings Corp. owns 16.89 percent.
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“The potential subscription will make the Summit Telco group the largest shareholder of DITO CME as the additional 9 billion shares will take their combined stake to nearly 49 percent of the company,” China Bank Capital Corp. managing director Juan Paolo Colet told the Inquirer.
Article continues after this advertisementOn the other hand, the stake of Uy, who currently owns 54.77 percent of the company through Udenna Corp., will be diluted.
Article continues after this advertisementDITO shares rose by 7.34 percent to P1.90 each on Monday following the disclosure. Based on this latest market price, this transaction can cost P17.1 billion.
Article continues after this advertisementThe listed company has a free float level of 20.15 percent. This represents shares of the company that are publicly traded.
“Given its large investment, we have to wait and see how Summit Telco will steer the company into profitability and create shareholder value,” Colet said.
Article continues after this advertisement Growth prospects“The additional infusion of equity into DITO CME signals confidence in the telco’s prospects in the face of intense competition,” he added.
DITO Tel CEO Eric Alberto said last month they had reached 13 million subscribers, which the company intends to grow to 16 million by the end of the year.
CoverageAlberto said they were also working on increasing their population coverage beyond the current 86.30 percent.
The additional share subscription is in line with DITO’s plan of securing up to P40.26 billion in fresh funding via private placements in the next five years or until the end of 2028. The company last year received P5.5 billion from selling common shares to Singapore-based third party investors.
On the debt side, DITO CME obtained last year a 15-year loan agreement from several creditors amounting to $3.9 billion (about P224.48 billion) in total. It drew P170.61 billion from these loan facilities last year to repay obligations and network construction-related payables.
The company, meanwhile, is set to launch its postponed P4.2-billion follow-on offering before the year ends.
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The company earmarked P27 billion in capital expenditures for this year to reach geographically isolated and disadvantaged areas where there is lack of internet connectivity. INQmango win
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