As telco assures investors of funding for rollout plans

MANILA, Philippines — Dito CME Holdings Corp. of Davao-based businessman Dennis Uy has assured the public that the company has funding options to support the network expansion of Dito Telecommunity despite cancelling an P8-billion stock rights offering aimed at supporting the telco’s commercial rollout.

Dito CME chief financial officer Joseph John Ong said commitments on more than $4 billion in long-term debt under a project finance arrangement have been secured by the company with various foreign lenders.

“We are currently working on the binding agreements of these loans. 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,” Ong said.

Dito CME, a publicly listed holding company handling the Udenna Group’s investments in the space of media, communications, entertainment and ICT, owns 54 percent of Dito Telecommunity, a joint venture by Uy’s group with China Telecommunications.

Uy, who serves as Dito CME chairman, said operations of Dito Telecommunity continue to expand and they are “more bullish this year.”

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

Dito, which currently has over five million subscribers, intends to end the year with around 12 million users.

The company has committed to increase basic internet speed to 55 Mbps and cover 84 percent of the country’s population over a five-year period through a total of P257 billion investment.

Dito CME late last year embarked on a stock rights offering (SRO) in hopes of raising P8 billion which was intended to be used primarily to fund its telco services all over the country.

The SRO, however was deferred due to “less than ideal” market conditions.

“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 Alberto said.

Uy said all subscriptions paid would be returned at the most expedient due process.

“There will be other attractive investment opportunities down the road and we remain confident in our unwavering commitment to creating long-term value for our shareholders,” he said.

“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,” said Ryan Tapia, president of China Bank Capital Corp., the sole underwriter for the SRO.