DITO CME Holdings of the Philippines PS is in discussions with potential investors, including a state pension fund, as it tries to increase capital, according to two persons familiar with the matter, causing its shares to increase by as much as 9.5% on Thursday.
The Philippines’ largest state pension fund, the Government Service Insurance System (GSIS), was among the potential investors in talks with the listed telecoms group valued at $706 million, according to two unofficial sources.
According to a source, DITO might raise approximately 8 billion pesos ($137 million), the amount of its proposed stock sale that was halted in January, adding that the arrangement to sell shares is not yet finalized and a deal could be reached in the coming year.
The possibility of a new investor pushed DITO’s stock up as much as 9.5% on Thursday, extending Wednesday’s 14% gain. However, its shares continue to trade at two-year lows, in line with a general market decline. Thursday saw an increase of up to 1.4% for the.PSI index of the Manila stock exchange.
The GSIS did not react quickly to a request for comment.
Udenna Corp, the parent company of DITO, stated, “We are unaware of any events that would effect the share price.”
Dennis Uy, a close associate and the leading campaign fundraiser for former Philippines President Rodrigo Duterte, controls DITO and Udenna. Uy has been compelled to liquidate assets in order to settle debts incurred amid a quick expansion and acquisition frenzy.
Since beginning commercial operations in March 2021, DITO has acquired over 12 million subscribers, a drop in the bucket compared to the 156 million users of the country’s two main networks combined.
DITO intends to turn a profit by 2026 and has invested $5 billion to build thousands of towers and launch a 5G service.