DITO CME Holdings Corp. has thus far raised only 14 percent or P5.5 billion in capital funds the enterprise needs to address its negative equity and finance the more than P40 billion required to keep the business from falling over between now and 2028.
Private investments by third parties like Xterra Ventures, Pte Ltd., Summit Telco Corporation Pte Ltd., and Summit Telco Holdings Corp. has helped DITO CME keep afloat.
“In addition to these private placements, management continues to have discussions with its existing investors and other entities to fulfill the target such that the company aims to raise additional equity via private placement before the end of 2024 to partially address the negative equity position,” DITO CME said.
“Please also note that for any capitalization raised by DITO CME, its foreign partner in DITO Tel, China Telecommunications Corp., has also committed to invest the same amount of equity into DITO Tel and/or convert its advances into equity for an equivalent amount in order to reduce the capital deficiency at the DITO Tel level,” it added.
By end-2025, DITO CME plans to convert shareholder advances by Udenna Corporation and China Telecommunication into equity. This will result in a net conversion of about P15.96 billion.
DITO CME also projects to complete its follow-on-offering (FOO) by September this year and raise equity between P1.95 billion to P4.2 billion.
DITO CME has engaged BDO Capital Corp. as underwriter for the exercise.
The company is acquiring the necessary regulatory approvals from the SEC and the Philippine Stock Exchange to conduct the FOO.
The company earlier reported total comprehensive loss of P19.56 billion in 2023 resulting in a capital deficiency of P35.37 billion.
As at end-March this year, its capital deficiency widened to P44.43 Billion.
“The main cause of the negative shareholders’ equity is due to DITO Tel’s pre-operating and start-up costs for the roll-out of its telecommunications network,” DITO CME said.
DITO Tel requires investment commitments of P256.54 billion for five years following the roll-out.
DITO Tel has thus far gained more than 11.3 Million subscribers, resulting in increasing cash flow from operations.
DITO Tel projects earnings before interest, taxes, depreciation and amortization (EBITDA) turning positive by end of 2025 and profitability by end of 2028.
