DITO raises P3.3B via shares sale; Udenna unloads 500M DITO shares

DITO CME Holdings Inc. said Monday it raised P3.3 billion from the private placement new shares with Summit Telco Holdings Corp., a Philippine-registered company wholly-owned by Singapore-headquartered Summit Telco Corp Pte Ltd, an existing shareholder of the listed telecommunications venture of Davao-based businessman Dennis Uy.

The listed company privately placed with Summit Telco Holdings a total 3.3 billion new shares at price equivalent to the stock’s par value of P1 each, a deep discount to the last traded price of DITO shares of P3.42 on 20 October. With the purchase of share block equivalent to a 16.89 percent stake in DITO, the transaction could potentially require Summit Telco Holdings to undertake a tender offer for the rest of DITO’s share.

But with a purchase price that’s 71 percent less than the last traded value of DITO shares, it is unlikely any of the existing shareholders will agree to a tender offer.

Summit Telco, the parent company, earlier acquired shares of DITO equivalent to 9.79 percent interest in DITO.

The private placement of new shares will dilute Summit Telco’s stake along with major shareholder Udenna Corp., the company that holds businessman Uy’s various investments.

A week before the private placement, Udenna sold a total 500 million shares of DITO at P3.12 each for a total P1.56 billion. The deal already reduced Udenna’s interest in DITO to 65.9 percent from 68.98 percent. That shareholding will further decline to around 54.77 percent as a result of the private placement. 

Because of the dilution of Udenna’s stake, the interest of Uy in DITO will of decline to around 25.6 percent from 30.8 percent prior to the private placement.

The issuance of new shares to cover the private placement to Summit Telco Holdings will increase DITO’s issued and outstanding shares to 19.54 billion from 16.24 billion.