PSE Halts Trading of DITO CME Following Deferment of ₱8 Billion Stock Rights Offering

DITO CME, which holds a controlling stake in DITO Telecommunity, recently announced that it postponed its ₱8-billion stock rights offering (SRO) in light of unfavorable market conditions. Following the announcement, the Philippine Stock Exchange (PSE) halted the trading of DITO CME Holdings Corp. shares on Monday. This has since been lifted after the company vowed to refund investors in the deferred offer.

“The exchange has required DITO to submit a full and comprehensive disclosure on the foregoing matter within the day,” explained the PSE in its disclosure notice. “Please note that this should not be construed as an approval by the exchange of the deferment of the offering. The company, its underwriter, and other advisers are responsible for strict compliance with the rules of the exchange,” it added.

The proceeds to be generated from the SRE were to be used to fund DITO Telecommunity’s expansion. “In lieu of this capital-raising exercise, we are studying several alternative financing proposals recently made available to us, which we see to be more value-enhancing to our shareholders,” said Ernesto R. Alberto, DITO CME President.

Despite the postponement, DITO CME assured that “arrangements are being made” to fund the expansion. “We have been able to secure commitments on more than $4 billion in long-term debt under a project finance arrangement with various foreign lenders. We are currently working on the binding agreements of these loans,” elaborated DITO CME Chief Finance Officer Joseph John L. Ong.

When brought up whether the move would directly affect the country’s third telco, DITO Telecommunity chief administrative officer Adel Tamano noted that the two companies are “separate and unique.” The telco continues on its pace to reach 12 million subscribers within the year as well as set on its commitment to reach 70 percent population coverage and an average download speed of 55 Mbps.

“Our assessment is that given these indicators, DITO Telecommunity remains a viable and sustainable business as we remain steadfast in our commitment to partner with the Philippine government and our private sector partners to provide world-class, affordable, connectivity to Filipinos wherever they may be,” affirmed Tamano.

Sources: BusinessWorld, ABS CBN