Dito to raise P27 billion from equity expansion

MANILA, Philippines — Dito CME Holdings Corp. is eyeing to convert nearly P27 billion in advances into equity this year to wipe out its capital deficiency and improve financial health.

In a disclosure to the Philippine Stock Exchange, Dito CME said it has raised P16.55 billion in funds through capital infused by private investors and its follow-on share offering last year.

However, the amount is still nowhere close to its capital deficiency that has reached P78.04 billion as of March, arising from the capital expenditures to build up the infrastructure network of telco unit Dito Telecommunity Corp.

Dito CME committed to proceed with efforts to generate more funds through private placements. The company aims to secure as much as P28.83 billion from private investments until 2028 to fund future projects and shore up equity position.

Further, Dito CME will convert advances into equity this year to raise up to P26.53 billion. It said the debt-to-equity conversion would be executed with its largest shareholders Udenna Corp. and China Telecommunications Corp.

“These advances are, in reality, intended to be put as equity by shareholders instead of advances, (but) they are currently booked as advances in order to preserve the equity split of 60:40 between the Philippine and foreign partners in Dito considering legal and regulatory limitations thereof,” Dito CME said.

Dito CME is also banking on Dito to start increasing revenue contribution as its subscriber base is now close to 14 million, served by 7,296 towers across the archipelago.

Dito is expected to book a positive earnings before interest, taxes, depreciation and amortization (EBITDA) in 2025 and to turn in a profit by 2028.

“Dito projects that it would be EBITDA positive by the end of 2025 and profitable by the end of 2028. Thus, the accumulated losses will be reduced and wiped out as soon as the operations are ramped up in the following years,” Dito CME said.

Last year, Dito CME signed an agremeent with Summit Telco Corp. Pte. Ltd. for the susbcription of up to nine billion primary common shares. The investor infused P10.36 billion in advances in Dito CME to finance capital requirements.

The transaction, once materialized, will make Summit Telco the majority owner of Dito CME, overtaking the Udenna Group.

Dito CME, owned by Davao-based businessman Dennis Uy, is struggling to keep finances afloat after investing heavily in Dito’s entry into the telco industry.