Dennis Uy revamps business empire for better fund access

MANILA, Philippines — Davao-based tycoon Dennis Uy is reorganizing his empire to ensure that his capital intensive telco startup, Dito Telecommunity Corp., has easy access to funds.

In a disclosure to the stock exchange on Tuesday, Dito CME Holdings Corp. — Uy's listed holding firm that currently has no operating business — said the company would proceed with its plan to fully acquire Udenna Communications Media and Entertainment Holdings Corp. (Udenna CME) from its parent Udenna Corp. 

This, in turn, will give Dito CME indirect interest in Dito Telecommunity, the country's third telco player where Udenna Corp. currently holds a 35% stake through its subsidiary Udenna CME. Under the approved terms of the transaction, Dito CME will swap 11.2 billion of its shares with Udenna Corp. at a price of P6 to 6.90 apiece to take over Udenna CME. 

“This is one step of our plan of realizing Dito CME’s ownership of Dito Telecommunity, through Udenna CME and DITO Holdings Corp.," Eric Alberto, Dito CME president, said.

The new ownership structure will give Uy "options to infuse additional capital to Dito Telecommunity, especially since the telecommunications business is capital intensive," filing documents said.

Trading of shares in Dito CME was suspended amid the ongoing restructuring.

As it is, the revamp is consistent with Uy's plan to build another holding firm — named Dito Holdings Corp. — that would hold all his telco shares.

Uy's Chelsea Logistics and Infrastructure Holdings Corp. earlier this month sold its 25% stake in the telco business to Dito Holdings Corp. Meanwhile, Udenna CME will also transfer its telco stocks to the forthcoming holding firm. 

After acquiring both Udenna and Chelsea's telco shares, Dito Holdings Corp. will have a 60% stake in Dito Telecommunity. The remaining 40% is owned by Uy's Chinese partner China Telecom.

"We want to deliver on the expectations of our shareholders and the investing public, thus we don’t want to make promises that we can’t keep," Uy said.

"Rest assured that we are working hard to execute on our plans as best we can. Our principal and immediate mission is to ensure the commercial launch of DITO Telecommunity by March next year," he added.