MANILA, Philippines — DITO CME Holdings Corp. intends to raise about P4.2 billion from a proposed follow-on offering, proceeds from which will fund the expansion of its telecommunication business at a time when demand for connectivity is rising due to accelerated digitalization.
In a disclosure on Friday, the parent company of DITO Telecommunity (DITO Tel) said its board of directors had approved the share sale of up to 10 percent of current issued and outstanding capital stocks—or 1.95 billion common shares—for P2.15 apiece.
In a separate disclosure, DITO CME said the target date for filing and submission of the proposed offering to the regulators is until Jun. 7.
The final offer price and prospectus are set to be out by Aug. 15.
The settlement date and listing are scheduled for Sept. 3.
The proposed offering was announced after DITO last year sold 5.5 billion common shares for P1 each to Singapore-based third-party investors.
READ: Dito CME secures P3.3B from most recent investor
Before this, DITO CME was supposed to complete an P8-billion stock rights offering in 2022 but decided to drop it due to weak demand from large investors. As a result, the company refunded the subscription payments already made by the investors.
Luis Limlingan, head of sales at Regina Capital Development Corp., said in an interview with the Inquirer said he cannot comment on whether the aborted deal would taint investor appetite for the upcoming follow-on offering but noted that “investors are very opportunistic so they will definitely look into any possible upside potential.”
Construction-related payables
On the debt side, DITO CME secured last year a 15-year loan agreement with several creditors amounting to $3.9 billion or about P224.48 billion in total.
READ: DITO CME secures $3.9-B loan
The company drew P170.61 billion from the loan facilities last year 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 where there is a lack of internet connectivity.
Mobile data is the company’s main revenue contributor, showing increasing demand for internet connection. The revenue for this segment surged by 39 percent to P2.55 billion in the first quarter from P1.84 billion a year ago.
However, net losses jumped to P4.11 billion for the period from just P336.67 million the previous year because of higher costs and foreign currency exchange losses.
READ: DITO CME losses ballooned in Q1
The telco passed its fourth technical audit last year—its commitment to the government after securing the franchise to operate in 2019.
The review showed that it had minimum average broadband speeds of 74.97Mbps (megabits per second) for 4G and 639.32Mbps for 5G—beyond the minimum 55Mbps requirement.
DITO Tel also registered a population coverage of 80.65 percent, surpassing the 80.01 percent commitment.