DITO CME Holdings Corp. is seeking P44.46 billion in fresh funds, including equity from old and new investors, to boost its expansion plans and partially offset capital deficiency brought about by previous network investments.
As part of various fundraising activities lined up, the parent company of the country’s third telco player had scheduled a follow-on offering this September to raise between P1.95 billion and P4.2 billion.
The company led by Davao-based businessman Dennis Uy previously said the capital infusion would “fund the group’s telecommunications and digital businesses’ funding requirements.”
READ: DITO group eyes P4.2 billion from follow-on offer to boost telecom unit
As of end-June, it has over 11.3 million subscribers and 7,450 telecommunication towers covering 80.65 percent of the country’s population. The sale has yet to receive regulatory approvals from the Securities and Exchange Commission and the Philippine Stock Exchange.
DITO CME also wants to secure up to P40.26 billion in fresh funding via private placements in the next five years or until the end of 2028.
The telco player said it was already in talks with “existing investors and other entities.”
DITO said the private investment would “partially address the negative equity position.” It noted that it spent P256.54 billion to upgrade its network in recent years, leaving it with a capital deficiency of P44.43 billion as of end-March.
“[The] other main source of losses is through depreciation. This item is germane to the startup nature of DITO Tel as it has to construct new towers and facilities for the rollout of its network, and would have to book depreciation in its books,” it added. In the first quarter, DITO registered depreciation and amortization of P3.43 billion, up 17 percent from P2.93 billion the year before. DITO CME last year received P5.5 billion from selling common shares to Singapore-based third party investors.
On the debt side, DITO CME also secured 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 to repay obligations and network construction-related payables.
DITO Tel earmarked P27 billion in capital expenditures for this year to reach geographically isolated and disadvantaged areas with little to no internet connectivity.