Investor infuses P2 billion into Dito

MANILA, Philippines — The parent unit of Dito Telecommunity Corp. has sold P2.24 billion worth of shares to a Cayman Islands-based firm to raise fresh funds for the capital requirements of the telco newcomer.

In a regulatory filing, Dito CME Holdings Corp. said that one of its units, Dito Holdings Corp., issued 2.24 billion shares, valued at P1 a piece, to Summit Global Ltd.

Dito CME said that the new shares purchased by Summit Global account for about 18.5 percent of the issued and outstanding capital stock of Dito Holdings.

Dito CME reduced its stake in Dito Holdings to 72.91 percent after the transfer of shares. Prior to the equity sale, Dito owned 89.46 percent of Dito Holdings through Udenna Communication Media and Entertainment Holdings Corp.

According to Dito CME, the funds raised from the transaction were allocated for the additional capital requirements of Dito Telecommunity. Dito Holdings used the proceeds to comply with its subscription payables owed to the telco.

Before this, Dito CME went on a selling spree in August, receiving P2.2 billion from the sale of shares to Singapore-based Summit Telco Corp. Pte. Ltd. (P1.59 billion) and Xterra Ventures Pte. Ltd. (P610 million), both of which were incorporated just this year.

The entry of Summit Telco and Xterra Ventures increased the issued and outstanding shares of Dito CME to 16.24 billion from 14.04 billion.

In an earlier interview with reporters, Dito CME president Eric Alberto said the investing public could expect the firm to embark on another fundraising activity within the year.

Dito Telecommunity is mandated to spend P257 billion on capital expenditures between 2020 and 2024. The amount is expected to give Dito Telecommunity a fighting chance to break into the telco market long dominated by PLDT Inc. and Globe Telecom Inc.

Alberto said Dito CME, as the parent unit, has to keep on raising funds for Dito Telecommunity to comply with its spending requirement. With the continuous expansion of Dito Telecommunity, Dito CME hopes to break even by 2025 and turn a profit by 2028.

“Because we are a startup, I think there is no let-up yet, (especially as) the rule of thumb for us is a minimum of a billion dollars a year because we are catching up,” Alberto said.

For the first semester, Dito CME decreased its net loss by 83 percent to P1.44 billion from P8.3 billion a year ago, as revenues grew by 65 percent to outpace the 18 percent rise in expenses.