PLDT, Inc. said it is not under pressure to divest the remaining stake in Rocket Internet after it has started unloading its shares in German e-commerce investor as part of its plan to fund its massive capital expenditure program this year.
PLDT Chairman, President and CEO Manuel V. Pangilinan said there is no pressure to divest the remaining one-third of its stake in Rocket. This after PLDT earlier this week announced it has committed to sell at least 6.8 million Rocket shares back to the German company. This represents around 67.4% of the Rocket shares held by PLDT Online.
Mr. Pangilinan said this would depend on the movement of the share price of Rocket, but the telco sees its investments in Rocket as still valuable.
“I think their offer closes [on] May 2nd, so let’s see how the take up would be. The plan is for the two-thirds would be taken up by the offer… There’s no pressure on the part of PLDT to dispose the remaining one-third… [It’s] reasonably well despite the loss on the price but I think given the prospects that we’re seeing in Rocket, I think they’re quite optimistic,” Mr. Pangilinan told reporters on April 17.
“The value is still there, from that perspective it is still important to us. The amount of money that you generate from the values of the one-third. So I think the bias, I’d like to think is that given the prospects for Rocket Internet, the bias is share price should improve in the long term.”
Rocket Internet earlier announced the buyback of up to 15.47 million shares through a public share purchase offer at €24 per share. PLDT stands to get around €163.2 million or around P10.51 billion from the deal.
In February, Mr. Pangilinan said the company may sell its position in Rocket to fund its capital expenditure (capex), which is expected to stay above P50 billion for this year. PLDT is set to expand its fixed and mobile networks as part of its five-year P260-billion capital expenditure (capex) program.
PLDT invested €333 million (around $362 million) for a 10% stake in Rocket in August 2014. In October 2014, Rocket Internet went public, which effectively diluted PLDT’s stake, which now stands at 6.1%.
However, the Rocket investment proved disappointing, as its startups recorded heavy losses.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Patrizia Paola C. Marcelo