By Ashley Erika O. Jose, Reporter
DITO CME Holdings, Inc. (DITO) said it plans to raise as much as P40.26 billion through funding from private investors over the coming five years to improve its financial standing and support its growth.
So far, the company has secured P5.53 billion in funding, DITO CME said in a stock exchange filing on Thursday.
The breakdown of this total includes P3.3 billion obtained in October, P610 million in August, and a further P1.59 billion by the close 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 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,” the company said, adding that any private placements will “partially address the negative equity position.”
At the same time, the company is considering launching another round of its follow-on offering (FOO).
“If the market conditions are ripe, and considering the heavy capital requirements for the rollout of the network of DITO Tel, DITO CME shall continue to consider launching another follow-on offering or stock rights offer,” DITO CME said.
The additional follow-on offering or stock rights offering will be conducted after its recently announced P4.2 billion follow-on offering, it said.
“The timetable and target equity raise, however, will be determined at a later time,” it said.
In May, DITO CME said its board of directors approved the proposed follow-on offering of up to 10% of its current issued and outstanding capital stock of 1.95 billion valued at P2.15 apiece.
“The company has submitted an application for a Follow-On Offering last May 31, 2023, to the Securities and Exchange Commission and The Philippine Stock Exchange, and it targets to complete such FOO by this September 2024,” DITO CME said.
The company said it is now in the process of securing 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 may 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 could be challenging, as investors might favor safer investments with better returns,” he said.
Investors’ confidence will be key in this plan, Mr. Arce noted.
“Uncertainty, especially in emerging markets, might make investors cautious. Furthermore, high market volatility can deter investors, as they may perceive additional offerings as a sign of financial distress rather than growth potential,” he added.
DITO CME, the operator of DITO Telecommunity Corp. (DITO Tel), said the third telco player will continue expanding its operations.
DITO Telecommunity is allocating up to P30 billion for capital expenditures this year, mainly for network rollout.
The company said it will be focusing on gaining market share and commercial rollout while also targeting new product launches.
“DITO Tel projects that it will be EBITDA (earnings before interest, taxes, depreciation, and amortization) positive by the end of 2025 and profitable by the end of 2028. Thus, the accumulated losses will be reduced and/or wiped out as soon as the operations are ramped up in the following years,” DITO CME said.
For the first quarter, DITO CME saw its attributable net loss widen to P4.11 billion from P336.67 million in the comparable period a year ago, despite posting higher gross revenues for the period.
According to the company’s financial statement, the company recorded a gross revenue of P3.78 billion, 61.5% higher than the P2.34 billion previously.
This comes after its gross expenses ballooned to P7.04 billion, up 31.1% from P5.37 billion in the same period last year.
The company has yet to release its second-quarter and first-half financial statement as of writing.
At the stock exchange, shares in the company gained five centavos or 2.56% to close at P2 each.