PLDT, Inc. announced on Thursday it has signed an agreement to sell separately $175 million worth of shares in its digital innovations unit Voyager Innovations, Inc. to a group of foreign investors led by investment firm Kohlberg Kravis Roberts & Co. (KKR) and Chinese tech company Tencent Holdings Ltd.
“Upon the closing of the transaction, which is expected within the fourth quarter of 2018, PLDT will remain as the majority shareholder of Voyager Innovations. The agreements also contain provisions for Voyager Innovations to issue additional shares to other investors which, if this were to occur, would reduce PLDT’s ownership to less than 50% while still remaining as the largest shareholder,” the company said in a statement.
Voyager is the subsidiary of PLDT handling mobile wallet PayMaya and remittance network Smart Padala. It also manages the company’s online loaning platform Lendr, and free mobile browsing app Freenet.
Tencent is the Chinese firm behind messaging mobile application WeChat and KKR is an investment company that also supported Indonesian ride-hailing company Go-Jek and Chinese finance management platform Suishou Technology.
PLDT Chairman, President and CEO Manuel V. Pangilinan first revealed details of the Voyager deal in August, saying then the sale of majority stake would help the company recoup its losses from the unit, which widened to P1.3 billion in the first half of 2018 from P300 million in the same period last year.
“It’s likely to produce a significant gain to the accounts of PLDT. I think if we can expedite the approval from the (Philippine Competition Commission), it is likely that we can see the gain some time in the fourth quarter of 2018,” Mr. Pangilinan said then.
He said in Thursday’s announcement, “Having global powerhouses such as KKR and Tencent as investors in Voyager Innovations demonstrates not only their confidence in the company’s ability to execute its vision, but also their confidence in the Philippine technology industry as a whole.”
“The foregoing investment in Voyager Innovations is not subject to the compulsory merger notification regime under the Philippine Competition Act and its Implementing Rules and Regulations. In addition, the Bangko Sentral ng Pilipinas, the Philippines’ central bank, confirmed that it interposes no objection to the investment,” it added.
PLDT has said since late last year its plan for Voyager was to find foreign partners that would help the unit expand its coverage, at least within the ASEAN market. It targets to have 30 million users on its platforms by 2020.
The original plan was for Voyager to seal a deal with Tencent within the first half of 2018, but Mr. Pangilinan said in May this was not pushing through as they didn’t initially get feedback from the Chinese tech giant.
PayMaya’s closest competition, Globe Telecom, Inc.’s GCash, took a minority investment from Chinese billionaire Jack Ma’s Ant Financial Services Group last year. Globe is to receive from Ant Financial, which owns China’s largest online payment service Alipay, its “know-how in using technology to provide equal access to financial services.”
Mr. Pangilinan said PLDT has invested some P9 billion to P10 billion in Voyager since 2013, and the entry of foreign investors is expected to generate significant development to the innovations unit.
“Since this will involve as well a significant amount to be injected into Voyager, it could fund the operations of Voyager on expanding in the next three to four years,” he said in August.
PLDT posted a 29% decline to its attributable net income at P11.76 billion in the first half, primarily due to lower net income from its wireless and other businesses.
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. — Denise A. Valdez