DITO CME Holdings Corp. said Thursday it is eyeing to raise up to P40.26 billion until 2028 to address negative equity position and support its expansion plans.
The company raised P5.5 billion as of end-2023 from private investments made by third parties Xterra Ventures Pte Ltd., Summit Telco Corp. Pte Ltd. and Summit Telco Holdings Corp.
“In addition to these private placements, the company’s management continues to have discussions with its existing investors and other entities to fulfill the target equity raise such that the company targets to raise additional equity via private placement before the end of 2024 to partially address the negative equity position,” DITO CME said.
“Please also note that for any capitalization that is raised by DITO CME, its foreign partner in DITO Tel, China Telecommunications Corp., have also committed to invest the same amount of equity into DITO Tel and/or convert its existing advances into equity for an equivalent amount in order to reduce the capital deficiency at the DITO Tel level,” it said.
DITO CME plans to convert the existing shareholder advances of Udenna Corp. and China Telecommunication into equity by end-2025.
This will result in a net total for conversion of about P15.96 billion as of 2023.
DITO CME said it expects to complete the follow-on-offering (FOO) by September 2024, raising equity between P1.95 billion and P4.2 billion.
DITO CME engaged BDO Capital Corp. as the underwriter for the FOO.
The company said it is obtaining the necessary regulatory approvals from the Securities and Exchange Commission and the Philippine Stock Exchange to conduct and launch the FOO.
The company earlier reported a total comprehensive loss of P19.56 billion in 2023, resulting in a capital deficiency of P35.37 billion.
The capital deficiency increased to P44.43 billion as of end-March 2024.
“The main cause of the negative shareholders’ equity is due to DITO Tel’s pre-operating and start-up costs for the rollout of its telecommunications network,” DITO CME said.
DITO Tel has to meet an investment commitment of about P256.54 billion for the first five years of the rollout.
DITO Tel already gained more than 11.3 million subscribers, resulting in increasing cash flows from operations.
DITO Tel expects to become EBITDA [earnings before interest, tax, depreciation and amortization] positive by end-2025 and profitable by end-2028.
