Dito CME moves forward with takeover of Dito Telecommunity
The group of Davao-based businessman Dennis Uy is moving to complete the transfer of telco startup Dito Telecommunity under publicly listed Dito CME Holdings Corp.
Dito CME said in a stock exchange filing on Wednesday the Securities and Exchange Commission (SEC) had approved on Aug. 27 its application for a capital increase. This would allow Dito CME to complete a previously announced asset swap deal with affiliate Udenna Corp., which controls Dito Telecommunity through layers of companies.
Under the transaction, Dito CME will issue 11.2 billion new shares to Udenna for 100 percent of Udenna Communications Media and Entertainment Holdings Corp. This will give Dito CME an indirect majority stake in Dito Telecommunity.
‘Unrelated third party’Apart from the share issuance to Udenna, Dito CME said it also issued another 35 million shares to an “unrelated third party.”
Following the transactions, Dito CME said its public ownership level stood at 20.02 percent as of August 27.
Dito CME earlier announced plans to hold a share sale through a rights offering. It has yet to announce further details on the matter.
Dito Telecommunity, a venture between Uy and China Telecom, formally launched commercial services in Mindanao and Visayas on March 8 and reached Metro Manila in May.
It was awarded a license to become the country’s newest major telecommunications player in 2019—part of the Duterte administration’s efforts to introduce more competition in the telco sector.
The conditions of the award included a five-year commitment period ending in 2024. During this time, Dito Telecommunity is required to reach 84 percent of the Philippine population and offer a minimum average internet speed of 55 megabits per second.
Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.