DITO CME is targeting P40.26B for financial assistance

By means of Ashley Erika O. Jose, Reporter

DITO CME Holdings, Inc. (DITO) said it plans to raise as much as P40.26 billion through financing from private investors over the next five years to improve its financial position and support growth.

So far, the company has secured P5.53 billion in financing, DITO CME said in a stock exchange filing Thursday.

The breakdown of this total includes P3.3 billion obtained in October, P610 million in August and another P1.59 billion by the end of 2023.

The capital was raised through financing agreements with external investors, including Xterra Ventures Pte. Ltd., Summit Telco Corp. Pte Ltd. and Summit Telco Holdings Corp., the company said.

“[DITO CME’s] Management continues to engage in discussions with its existing investors and other entities to achieve the targeted capital increase, with the company aiming to raise additional equity capital via private placement before the end of 2024. the negative stock position.”

At the same time, the company is considering launching a new round of its follow-on offering (FOO).

“If market conditions are ripe, and given the heavy capital requirements for the rollout of DITO Tel’s network, DITO CME will continue to consider launching a new follow-on offering or equity rights offering,” DITO CME said.

The additional follow-on offering or stock rights issuance will follow the recently announced P4.2 billion follow-on offering, the company said.

“However, the timetable and target share increase will be determined at a later date,” the report said.

In May, DITO CME said its board of directors had approved the proposed follow-on offering of up to 10% of its current issued and outstanding share capital of P1.95 billion, valued at P2.15 each.

“The company has filed for a follow-on offering with the Securities and Exchange Commission and the Philippine Stock Exchange on May 31, 2023, and aims to close such FOO by September 2024,” DITO CME said.

The company said it is now in the process of obtaining the necessary regulatory approvals from the Securities and Exchange Commission (SEC) and the listing department of the Philippine Stock Exchange to launch its follow-on offering.

For Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce, several factors could impact the viability of DITO CME’s planned additional follow-on offerings.

“Interest rates and inflation are crucial. “If interest rates are high, attracting investors to the follow-on offering may be a challenge as investors may prefer safer investments with better returns,” he said.

Investor confidence will be crucial in this plan, Mr. Arce noted.

“Uncertainty, especially in emerging markets, can make investors cautious. In addition, high market volatility may deter investors as they may view additional offerings as a sign of financial distress rather than a sign of growth potential,” he added.

DITO CME, the operator of DITO Telecommunity Corp. (DITO Tel), said the third telecom player will continue to expand its business.

DITO Telecommunity is allocating up to P30 billion in capital expenditures this year, mainly for network rollout.

The company said it will focus on increasing market share and commercial rollout, while also focusing on launching new products.

“DITO Tel forecasts that EBITDA (earnings before interest, taxes, depreciation and amortization) will be positive by the end of 2025 and profitable by the end of 2028. The accumulated losses will therefore be reduced and/or wiped out as quickly as possible. as activities are ramped up in the coming years,” said DITO CME.

For the first quarter, DITO CME saw its attributable net loss widen to P4.11 billion, compared to P336.67 million in the comparable period a year ago, despite higher gross revenues for the period.

According to the company’s financial statement, the company posted gross sales of P3.78 billion, up 61.5% from P2.34 billion previously.

This comes after gross expenditures rose to P7.04 billion, up 31.1% from P5.37 billion in the same period last year.

The company has not yet released financial statements for the second quarter and first half of the year at the time of writing.

On the stock exchange, shares in the company rose five centavos or 2.56% to close at P2 each.