Three years after receiving former President Rodrigo Duterte’s approval for DITO Telecommunity to operate the third telco, Dennis Uy of Davao is considering selling a portion of his majority ownership in the company.
Although he would want to keep Phoenix Petroleum and Chelsea Logistics and Infrastructure if he had his way, this is a part of Uy’s plan to sell off essential businesses in his economic empire.
In an interview with Bloomberg, DITO CME Holdings President Ernesto Alberto stated that the publicly traded company was willing to “sell down” its 53 percent ownership in the third telco to acquire money to support its significant capital needs.
DITO CME, according to Alberto, had “requested banks to locate it a suitable private equity placement partner.”
However, Alberto said management preferred a bridging facility or a two- to three-year loan with a balloon payment based on equity.
Two or three years from now, “we are certain that the value of the shares will be substantially more,” Alberto stated, “barring of course, event risks.”
The National Telecommunications Commission prohibited DITO from selling its stake to any other telco unit after the company won the bidding for a third telco license in 2019 (it was the only firm left among interested buyers). If it did, it would lose its frequencies and Certificate of Public Convenience and Necessity.
Investors were forewarned by the company’s auditor, P&A Grant Thornton, that for DITO to be a going concern, it needed to raise capital to pay its obligations ($700 million from the Bank of China and $500 million from China Minsheng Banking Corp.).
Since it began conducting business in March 2021, DITO’s liabilities have grown to P149.9 billion, more significant than its assets, with a P18 billion capital shortfall.
Uy preferred to keep his majority ownership in Phoenix and Chelsea while seeking purchasers for sections of his indebted enterprise to acquire money.
“We know how to sell, and we know how to buy.”
We reason if any of our assets are desirable and make sense, but again, it isn’t easy because everyone is related to one another, according to Uy.
Uy and ultra Ricky Razon are currently negotiating for Uy to sell his stakes in casinos and the development of Malampaya gas. Uy had already sold his shares in the 2GO Group to the Sy family and a five-building Clark Global City business process outsourcing complex to Clark Aeropark Development Philippines Inc. (ADPI), a particular purpose company owned by funds managed by CarVal Investors.
Source (1)