List or sell? PLDT weighs options on data centers

MANILA, Philippines — Telco-to-tech provider PLDT Inc. is open to the possibility of listing a real estate investment trust (REIT) in the Philippine Stock Exchange (PSE), eyeing to raise fresh capital from its data center business for debt payments.

PLDT chairman, president and CEO Manuel V. Pangilinan yesterday confirmed that the telco is planning to sell a stake in its $1 billion portfolio of data centers.

However, if this plan falls through, PLDT may turn to the PSE to explore the option of listing the business as a REIT.

If Pangilinan is to choose, however, he prefers that PLDT generate fresh capital from making the venture go public. He said listing the data center portfolio would allow the telco to retain control, but the downside is that PLDT will shoulder all of the expenses on its own.

Meanwhile, a sale would mean that the telco can generate the highest possible amount it can get from data centers. The drawback in going this route is that PLDT may have to surrender control depending on the outcome of negotiations with sellers.

“I think in the next month or so, probably in or before June, we should decide where we want to go,” Pangilinan said.

PLDT is looking to maximize the value of its data centers to acquire enough capital to reduce its debt level, which totaled P242.2 billion at the end of March.

“If you were to sell control of the equity, of course, the price would be higher. It is not a perfect world. As long as you get [a certain] million dollars of cash by way of sale, REIT or some other device, the main objective is to reduce the debts,” Pangilinan said.

In a recent report by Reuters, PLDT is said to be negotiating with Japan’s Nippon Telegraph and Telephone for the possible sale of up to 49 percent of its data center arm. The transaction could amount to as much as $750 million.

In March, PLDT created a new unit called VITRO Inc. to develop and operate data centers. Right now, PLDT operates 10 facilities with a capacity of 50 megawatts, but the company will double this once VITRO Sta. Rosa, its largest data center, opens in July.

VITRO Inc. has no plans of stepping on the brakes anytime soon, as it evaluates the opportunity of building a 12th, 13th and 14th facility.

According to a study by Structure Research, data centers in the Philippines combined for a value of $219 million in 2023, and could expand by an average of 36 percent until 2028.