Foreign group seen taking majority stake in Dito CME

MANILA, Philippines — Davao-based businessman Dennis Uy could be poised to give up his controlling stake in listed holding company Dito CME Holdings Corp. in favor of a group backed by foreign investors.

An industry source familiar with the matter told The STAR that the plan is for the foreign investors-led group to take a majority share in Dito CME.

The source said the investors want to “go all in” on Dito CME.

“They are here to support the company,” the source said.

The source is referring to the group behind Summit Telco Holdings Corp., a newly incorporated holding company which subscribed to P3.3 billion worth of common shares of Dito CME in October last year.

The proceeds was fully invested by Dito CME in its operating subsidiary, Dito Telecommunity Corp., to comply with capital contribution commitments and support operations for the rollout of its telecommunications business.

Summit Telco Holdings is wholly owned by Singapore-registered Summit Telco Corp. Pte. Ltd., an existing shareholder of Dito CME.

No further details are available about Summit Telco, but the source said that the entity is composed of ”a group of investors.”

Following Summit Telco Holdings’ subscription last October, Dito CME’s foreign ownership level increased to 29.52 percent from 15.19 percent.

Dito CME is majority owned by Uy through Udenna Corp. with 54.77 percent, while Summit Telco Holdings owns 16.89 percent and Summit Telco Corp. Pte. Ltd. holds 8.14 percent.

The company’s public float stands at 20.15 percent.

The source said Uy, however, will not divest from Dito CME as he intends to keep a minority stake in the listed firm.

Uy stepped down as president of Dito CME in 2020 but has remained as the company’s chairman.

“Dito needs deep-pocketed major shareholders that can provide significant financial support to the company,” China Bank Capital Corp. managing director Juan Paolo Colet told The STAR.

Colet said that if the company is able to find new investors who can commit the necessary equity funding, then that should be positive for it in the immediate term.

“Additional equity is very important because Dito’s telecommunications business is capital intensive and its current operating cash flow remains negative,” he said.

As the country’s third player in the telco industry, Dito Telecommunity is ramping up its network to keep up with industry giants PLDT and Globe.

Dito CME is a publicly listed holding company handling the Udenna Group’s investments in the space of media, communications, entertainment and ICT.

It has diverse assets held through operating companies involved in telecommunications, digital platforms and applications, media and content, analytics and digital infrastructures.

Last month, Dito CME submitted a registration statement with the Securities and Exchange Commission (SEC) for the issuance of up to 1.95 billion common shares from the existing unissued authorized capital stock for subscription by way of a follow-on public offering at an offer price of up to P2.15 per share.

The issuance is subject to the approval of the SEC and listing approval by the Philippine Stock Exchange.