Fitch unit: Tower sale, Sky Cable acquisition 'credit positive' for PLDT
MANILA, Philippines — PLDT Inc.’s decision to embark on another tower sale and acquire Sky Cable’s broadband business is “credit positive” for the company, a Fitch unit said, as the moves could help raise cash for capital expenditure and debt payments.
In an emailed commentary on Tuesday, CreditSights noted PLDT’s decision to further divest from its tower segment was “mildly credit positive”.
Meanwhile, the purchase of Sky Cable is “net credit positive” as it “represents a logical strategic addition to PLDT’s dominant cash-generative broadband business.”
“We still view PLDT as one of the strongest corporate bond issuers in the Philippines based on credit fundamentals,” the commentary read.
As it is, PLDT recently announced plans to sell 1,012 towers to tower infrastructure company Frontier Towers for P12.1 billion. The deal is expected to be completed before the end of the year.
This is the fourth time PLDT has sold its tower assets since April 2022.The Fitch unit said this new sale will fund the Pangilinan-led telco’s hefty capital expenditures.
On the other hand, PLDT’s announcement last week underscored the company’s aggressive plan to bolster its broadband business. The telco announced the plan to purchase the Lopez-owned Sky Cable, which involved the firm’s broadband assets, for P6.75 billion.
CreditSights expects that the Sky Cable deal won’t face any regulatory hurdles, in spite of their outlook that the purchase will net PLDT a “comfortable lead” over its broadband rivals.
The Fitch unit indicated that the purchase could expand PLDT’s broadband revenue market share to 47-48%. If the deal is cleared by regulators, PLDT will add 350,000 into its broadband subscriber base.
As it is, PLDT dominated headlines in past months following its tax woes with Makati City and the P48 billion capex overrun in December, which led to investigations.
“We think (PLDT’s) potential corporate governance flaws are counterbalanced by its solid credit fundamentals,” CreditSights said,
Shares in PLDT finished trading up 1.23% to P1,322 apiece on Tuesday.
Editor's Note: A unit under PLDT's media conglomerate has a majority stake in Philstar Global Corp., which runs Philstar.com. This article was independently produced following editorial guidelines.
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