PSE suspends DITO CME shares trading over deferred offering

By Keren Concepcion G. Valmonte, Reporter

THE Philippine Stock Exchange (PSE) has imposed a trading halt on the shares of DITO CME Holdings Corp. beginning on Monday at 9 a.m., following the company’s announcement to postpone its P8-billion stock rights offering (SRO).

“The exchange has required DITO to submit a full and comprehensive disclosure on the foregoing matter within the day,” the PSE said in a disclosure notice on Monday.

However, the PSE said that it has yet to approve of the deferment of the company’s rights offer.

“Please note that this should not be construed as an approval by the exchange of the deferment of the offering,” the PSE said.

“The company, its underwriter, and other advisers are responsible for strict compliance with the rules of the exchange,” it added.

DITO CME told the exchange over the weekend that it plans to defer its SRO because “current market conditions are less than ideal to pursue the offering.”

“In lieu of this capital-raising exercise, we are studying several alternative financing proposals recently made available to us, which we see to be more value-enhancing to our shareholders,” DITO CME President Ernesto R. Alberto said in a separate statement on Sunday evening.

China Bank Capital Corp., the sole underwriter of the company’s SRO, said it “respects” the company’s decision to postpone the offering despite seeing positive support.

“While we saw good support from existing shareholders, we respect DITO CME’s decision to defer the SRO in the light of current market conditions and other perceived risks. When conditions improve, we are confident that DITO CME may return to the market,” China Bank Capital President Ryan L. Tapia said.

Proceeds from the offer were supposed to be used for the company’s telecommunications services across the country.

However, DITO CME said “arrangements are being made” to fund the expansion. It said there are already lenders, which the company did not name, that have committed to help the company with the financing of its DITO Telecommunity expansion.

“We have been able to secure commitments on more than $4 billion in long-term debt under a project finance arrangement with various foreign lenders. We are currently working on the binding agreements of these loans,” DITO CME Chief Finance Officer Joseph John L. Ong said.

“These commitments are more than enough to finance the rollout plans of DITO Telecommunity for the last three years of our five-year capital expenditure plans,” he added.

Meanwhile, DITO CME Chairman Dennis A. Uy said the company is “more bullish this year” as it pursues its expansion plans.

“In fact, we are very confident of DITO Telecommunity passing its third annual technical audit in July which commits to 70% population coverage and a minimum average speed of 55 Mbps,” Mr. Uy said.

He also thanked DITO CME shareholders who subscribed to the SRO and assured that “all subscriptions paid will be returned at the most expedient due process.”

Meanwhile, COL Financial Group, Inc. President and Chief Executive Officer Conrado F. Bate said the public should wait for the PSE’s decision on the issue.

“We trust that our regulators will handle this development with the protection of those investors in mind, especially since there is a large number of minority shareholders that participated in the offering,” Mr. Bate said in a press briefing on Monday.

“For now, we should wait for the decision of the regulators on this issue, but we hope that DITO and the PSE can resolve the suspension matter as soon as possible for the benefit of the shareholders impacted,” he added.

Japhet Louis O. Tantiangco, senior research and engagement supervisor at Philstocks Financial, Inc., said sentiment from the developments would affect only DITO CME.

“By the end of the day, confidence towards a company who is aiming to raise capital in the market would depend on the company’s fundamentals,” Mr. Tantiangco said in a Viber message.

“If the company who is raising capital is able to deliver robust financial performance and prospects, and if its offer is at an attractive price, then we may still see strong appetite towards the offer,” he added.