ISM hikes capital, changes name as it transforms into telecom unit of Dennis Uy
ISM Communications Corp. is set to transform into the telecommunications and media arm of Davao-based businessman Dennis A. Uy, who last year teamed up with state-run China Telecom and won a bid to become the country’s third telco player.The transition was formalized on Tuesday as ISM’s board approved both the change of its name to Dito CME Holdings Corp. and a massive increase in its capital from P2.8 billion to P40 billion, a stock exchange filing showed.
Dito Telecommunity is the holder of the third telco license, which was bagged by Uy’s Udenna Corp., whose assets span energy, logistics, property and restaurants and China Telecom in November2018.
In step with this plan, ISM will acquire 100 percent of Udenna Communications Media and Entertainment Holdings Corp., which was described as a shell entity, meaning it has no existing assets.
“Udenna Communications Media and Entertainment Holdings Corp. is intended to be the parent entity that holds the Udenna group’s shares in telecommunications, media and entertainment businesses,” the disclosure showed.
No other details were revealed, spooking some investors, who sold down their ISM shares on Tuesday.
Joseph Roxas, president of Eagle Equities Inc., said investors were wary of the lack of information and also of the shifting plans of ISM, which said in an Oct. 18, 2018 disclosure that it would be the listing vehicle of Udenna, a much larger company with operating and profitable assets.
On Tuesday, the company said the backdoor listing of Udenna via ISM “will no longer push through.”
“People were buying ISM then because it was going to be Udenna,” Roxas said. “The movement of the share price now depends on the investors’ appreciation of just the telco business.”
ISM shares fell as low as 17.6 percent on Tuesday before narrowing losses to close at P3.63 per share, down 12.53 percent.
Dito, formerly known as Mislatel, answered the Duterte administration’s call in 2018 to challenge telco incumbents PLDT Inc. and Globe Telecom.
The company, which earlier committed to set up a nationwide telco network and spend at least P257 billion over a five-year commitment period, is expected to rollout commercial services by the middle of 2020. INQ
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