THE Philippine Stock Exchange (PSE) has lifted the trading suspension on DITO CME Holdings Corp. shares after the company published additional details on the postponement of its stock rights offering (SRO).

The company will resume trading on Wednesday, the PSE said in disclosure notice on Monday evening.

“In view of the foregoing, trading of DITO (the company’s ticker symbol) will resume on Feb. 2, 2022 at 10:30 a.m.,” the PSE said. Financial markets are closed on Tuesday in observation of the Lunar New Year holiday.

The exchange halted the trading of DITO CME shares on Monday, 9 a.m., after the company announced plans to defer its SRO over the weekend.

First Grade Finance, Inc. Managing Director Astro C. del Castillo is expecting investors to “react negatively” towards the stock once trading resumes.

“I think expect DITO to eventually succumb to the negative sentiment of investors in the market,” Mr. Del Castillo said in a phone interview on Tuesday. He added that DITO CME’s postponement of its offering might have a “reverberating effect on other companies” planning to do SROs.

“It could possibly affect sentiment, especially [on] small, emerging companies like DITO,” Mr. Del Castillo said.

Meanwhile, Regina Capital Development Corp. Head of Sales Luis A. Limlingan said overall market sentiment towards future SROs “probably won’t be affected.”

“Sentiment probably won’t be affected since it’s isolated to DITO. I think investors look [at] offerings on a per-issue basis and not as a whole,” Mr. Limlingan said in a Viber message on Monday.

In its disclosure on Monday evening, DITO CME said that the postponement of the offering came after “extensive discussions” with its majority shareholder, Udenna Corp., and its sole underwriter, China Bank Capital Corp.

“In consultation with China Bank Capital and the support of Udenna, DITO CME decided that a deferment of the SRO would be in the best interest of the Company, and especially its minority shareholders,” DITO CME said.

The company cited “less than ideal market conditions” as the Philippine financial markets opened the year on “a negative note,” following the surge in coronavirus disease 2019 (COVID-19) infections due to the Omicron variant and the hawkish stances of the US Federal Reserve.

“We note that various investors have expressed disappointment in not being able to continue the SRO, but the Company will definitely pursue options of relaunching the SRO, a public offer, or other fund raising means, as soon as market conditions have improved, with the approval of the regulators,” DITO CME said.

Proceeds of the SRO were supposed to be used to invest in the expansion of its telecommunications services under DITO Telecommunity Corp. To finance the move, DITO CME on Monday said it had secured commitments worth $4 billion in long-term debt under a project finance arrangement with foreign lenders.

DITO Telecommunity has received “strong support from users and subscribers” since it was commercially launched, DITO CME noted. DITO Telecommunity has obtained over 5 million subscribers within nine months.

Meanwhile, DITO CME said it is working with AB Stock Transfers Corp. “to ensure that funds received by investors are returned at the soonest possible time.”

Refunds to certified shareholders, the Philippine Depository & Trust Corp., and institutional buyers are scheduled on Feb. 2, while refunds for trading participants and scripless shareholders will be made on Feb. 3.

However, in its disclosure notice on Monday, the PSE also said that the lifting of the trading halt does not mean it already approves of DITO CME’s SRO deferment.

“We wish to emphasize that the lifting of the trading halt should not be construed as an approval by the exchange of the deferment of the offering and is without prejudice to any regulatory action that the exchange may pursue in order to ensure full compliance with the applicable rules and for the protection of the investing public consistent with the mandate of the exchange, as a self-regulatory organization, to maintain a fair and orderly market,” the PSE said.

“The company, its underwriter, and other advisers are responsible for strict compliance with the rules of the exchange,” it said. — Keren Concepcion G. Valmonte