PSE halts trading of DITO CME shares
The Philippine Stock Exchange has halted the trading of DITO CME Holdings Corporation, the Udenna Group’s media, communications, entertainment and information technology (“IT”) subsidiary, pending the submission of a full and comprehensive disclosure on its unilateral move to defer its ongoing P8 billion stock rights offering.
“The posting of DITO’s disclosures and the imposition of a trading halt is strictly in view of the materiality of the information and for dissemination purposes only,” said the PSE.
It added that, “The Exchange has required DITO to submit a full and comprehensive disclosure on the foregoing matter within the day. Please note that this should not be construed as an approval by the Exchange of the deferment of the offering,” stressed the PSE.
It added that, “this is without prejudice to any regulatory action that the Exchange may pursue in order to ensure full compliance with the applicable rules and for the protection of the investing public consistent with the mandate of the Exchange, as a Self-Regulatory Organization, to maintain a fair and orderly market.”
“The Company, its underwriter, and other advisers are responsible for strict compliance with the rules of the Exchange,” said the PSE.
DITO CME told the PSE that, “management has determined that current market conditions are less than ideal to pursue the offering” and that “upon careful consideration of its business strategies, DITO CME has decided to defer the Stock Rights Offer.”
It added that, “ shall refund any and all subscription payments made by any existing shareholder or qualified institutional buyer during the offer period of the Stock Rights Offer.”
“The Exchange disclaims any liability arising from, or in connection with, the foregoing matter,” the PSE said.
DITO had even received regulatory approval to extend its stock rights offer through Feb. 2, from the original Jan. 18 deadline, allegedly to “allow more qualified investors to obtain additional shares at an attractive discount.”
The company had claimed that, “the extension was granted due to numerous requests from shareholders who were unable to subscribe to the offering nor receive their SRO kits on time due to logistical difficulties brought about by the surge of COVID-19.”
DITO CME was offering a total of 1.64 billion common shares, priced at P4.88 per share. The offer price was an 18.4 percent discount from the closing price as of Jan. 13, 2022 and was set at the bottom of its indicative price range.
With the postponement of the rights offering, DITO CME President Ernesto R. Alberto said that, “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.”
“While we saw good support from existing shareholders, we respect DITO CME’s decision to defer the SRO in the light of current market conditions and other perceived risks. When conditions improve, we are confident that DITO CME may return to the market,” said China Bank Capital Corporation President Ryan L. Tapia. China Bank Capital was the sole underwriter for the SRO.
DITO said that, “Notwithstanding the deferral of the SRO, arrangements are being made, to which various lenders have already committed to provide more than adequate funding for the network expansion of DITO Telecommunity, subject only to the completion of documentation."
“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,” said DITO CME CFO Joseph John L. Ong.
He added that, “We are currently working on the binding agreements of these loans. These commitments are more than enough to finance the roll-out plans of DITO Telecommunity for the last three years of our five-year capital expenditure plans.”
“The operations of DITO Telecommunity continue to expand and we are more bullish this year. In fact, we are very confident of DITO Telecommunity passing its third annual technical audit in July which commits to 70 percent population coverage and a minimum average speed of 55 Mbps,” reassured DITO CME Chairman Dennis A. Uy.
He added that, “We thank all of our existing shareholders who lent their unwavering support to the SRO by subscribing to it. All subscriptions paid will be returned at the most expedient due process.”
“There will be other attractive investment opportunities down the road and we remain confident in our unwavering commitment to creating long-term value for our shareholders. We shall continue to work hard for you,” Uy said.