PSE lifts DITO trading halt

Published February 1, 2022, 5:06 PM

by James A. Loyola

The Philippine Stock Exchange has lifted the trading halt imposed on the shares of DITO CME Holdings Corporation after the firm provided additional information in relation to the deferment of its P8-billion stock rights offering.

“In view of the foregoing, trading of DITO shares will resume on February 2, 2022 at 10:30 a.m.,” said the PSE.

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The bourse, however, emphasized that the lifting of the trading halt should “not be construed as an approval by the Exchange of the deferment of the offering.”

It added that this is also “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,” stressed the PSE.

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Based on DITO’s disclosure to the PSE, it intends to start the refund of subscribers to the SRO starting Feb, 2, 2022 beginning with certified shareholders, institutional buyers and the Philippine Depository & Trust Corporation.

Trading participants that have coursed subscriptions through the PDTC as well as scripless shareholders will be refunded starting Feb. 3.

“In terms of the Company’s decision in deferring the SRO, it was a long thought-out process with extensive discussions between DITO CME, the majority shareholder, Udenna Corporation, and the sole underwriter, China Bank Capital Corporation,” said DITO President Ernesto R. Alberto.

DITO CME President Ernesto R. Alberto

He added that, “In consultation with China Bank Capital and the support of Udenna, DITO CME decided that a deferment of the SRO would be in the best interest of the Company, and especially its minority shareholders.”

“After the pricing of the SRO in December 2021, the Philippine financial markets opened on a negative note in 2022 due to the sudden occurrence of events, particularly the COVID-19 Omicron variant surge and hawkish pronouncements of the Federal Reserve,” Alberto explained.

With the less than ideal market conditions, Alberto said, the company believes that it has the obligation to ensure that the investment of all its shareholders, including the minority shareholders, are sufficiently protected and that other viable options to raise funds are instead pursued by the Company. As such, he said, the Company determined that the “best course of action is to preserve the status quo, for now, and to defer the SRO.”

“Given the decision by the Company and its majority shareholder, Udenna, to preserve the status quo, the deferral of the SRO consequently made the Udenna Corporation undertaking and China Bank Capital underwriting moot,” Alberto claimed.

He assured that, “…in the coming months, we intend to relaunch an offering to interested investors. We note that various investors have expressed disappointment in not being able to continue the SRO, but the Company will definitely pursue options of relaunching the SRO, a public offer, or other fundraising means, as soon as market conditions have improved, with the approval of the regulators.”

Prior to its decision to shelve its SRO, DITO had 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.”

 
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