DitoTel’s P64B in loans falling due on May 26
MANILA -Debt woes are mounting for Davao-based businessman Dennis A. Uy as his telecommunications venture with China Telecom seeks a fresh extension to a nearly P64 billion worth of loans falling due next week.
Dito Telecommunity (DitoTel), which is in the midst of a network rollout, has several bank loans with Bank of China’s overseas and domestic branches as well as China Minsheng Banking Corp. Ltd. that will mature on May 26, 2023 after an extension was granted last year, according to the May 15 financial report of listed parent firm Dito CME Holdings.
Dito CME said the end-March carrying value of the loans with Bank of China Ltd.-Singapore branch stood at P10.87 billion; China Minsheng Banking Corp. Ltd Shanghai Pilot Free Trade Zone Branch, P25.96 billion; Bank of China-Hong Kong, P24.25 billion, and Bank of China-Manila worth P2.55 billion.
Dito CME president Ernesto “Eric” Alberto told the Inquirer they were confident in getting another debt extension as the group finalizes a separate long-term loan facility worth $3.9 billon (P217 billion).
“These bridge loans are to be paid and absorbed via the $3.9-billion project finance long-term loan facility currently being finalized by DitoTelecommunity’s senior management, with target closing within the year,” Alberto said in a text message.
“[F]unding for the telco greatly helped by partner ChinaTel, which has both the better financial muscle and creditor relationships to raise and arrange such magnitudes of funding requirement for the project,” he added.
Dito CME said in the filing it was also planning potential fundraising exercises this year, including reviving a share sale that was cancelled in 2022.
At of end-March, Dito CME had interest-bearing debt of P85.98 billion, down 2.5 percent from the level at the end of December last year. It also recorded a capital shortfall of P28.5 billion at the end of the first quarter.
Last Feb. 13, the group sealed another Chinese currency (CNY) loan deal worth P5.2 billion loan with shareholders. At the end of March, it made drawdowns of CNY 165 million or P1.3 billion, the filing showed.
In a separate statement, Dito CME said it reduced operating losses during the quarter to P3 billion.
It said losses were blunted by “strict cost-containment initiatives” and a sharp increase in foreign exchange gains of P4.32 billion. This was a reversal of foreign exchange losses of P2.3 billion last year.
Revenues soared 72 percent to P2.34 billion as the company increased its telco subscriber count to 16 million.
“We remain steadfast to our investment in Dito Telecommunity with its continued growth trajectory and expanding relevance as a digital enabler to the Philippine market,” Alberto said in the statement.
“We are confident that this will continue as DitoTel continues to expand its network with commitments to increase population coverage to 80 percent this year and 84 percent by 2024,” he added.
DitoTel’s five-year government commitment to complete its rollout ends in 2024.
Uy, who owns energy, logistics, telecommunications and food conglomerate Udenna Corp., earlier told Bloomberg News he was open to selling assets to meet debt payments. The group earlier sold a stake in the Malampaya gas project to billionaire Enrique Razon Jr. and logistics firm 2GO Group to the Sy family’s SM Group.