Digitel to raise capital to P25B

MANILA, Philippines - Digitel Telecommunications Philippines Inc. (Digitel) has obtained the Securities and Exchange Commission’s nod to raise its capitalization from P9 billion to P25 billion.

The increase is intended to facilitate the conversion of P16 billion worth of obligations into common shares by 2013 and 2014, the company said.

These obligations are in the form of zero-coupon convertible bonds originally issued by Digitel and its subsidiaries to parent firm JG Summit Holdings Inc.

The convertible bonds accounted for a significant portion of the P69.1 billion worth of PLDT shares, paid by Philippine Long Distance Telephone Co. to acquire a 51-percent stake in Digitel from JG Summit. The shares were priced at P2,500 each.

The bulk of the price paid by PLDT was used to pay the P34.1 billion intercompany advances made by JG Summit to Digitel, which operates the Sun Cellular mobile brand.

JG Summit sold a portion of the PLDT stake it obtained at P2,500 each, reducing its holdings to eight percent from 12 percent.

The shares were sold back to PLDT major shareholders First Pacific Co. Ltd of Hong Kong and NTT DoCoMo of Japan.

With the sale, PLDT now corners about 70 percent of the telecom industry in terms of revenue and subscriber base.

Digitel   posted a net income of P15.7 million in the nine months ending September 2011, down 98.15 percent from the previous level.

As of end-September, Digitel’s mobile subscriber base reached 16 million, with pre-paid subscribers accounting for the bulk of 14.5 million.