DITO Telecommunity Corp. said Tuesday its business remains “viable and sustainable” despite the deferment of a fundraising activity by its major shareholder.
DITO chief administrative officer Adel Tamano said it is “inappropriate” for the company to comment directly on the deferment of the stock rights offering by DITO Communications Media and Entertainment because the two companies are “separate and unique”.
DCME, which holds a controlling stake in DITO Telecom, dropped its P8-billion SRO over tepid market conditions. The bulk of DCME’s SRO proceeds will be used to fund DITO Telecommunity’s expansion nationwide.
Besides telecom, DCME’s portfolio includes media, entertainment and information technology.
“That said, we are confident that DITO Telecommunity shareholders are in a position to ensure the operation of the company given the strong showing of DITO—the milestones it has achieved from the network roll-out to the audit results, the number of commercial touchpoints, and most especially the number of subscribers since our commercial launch, a mere ten months ago,” Tamano said.
The Philippine Stock Exchange said Tuesday it lifted the trading suspension on DITO CME even as the issue on the deferment of its stock rights offering remained hanging. DITO CME shares will resume trading on Feb. 2 at 10:30 a.m.
“We wish to emphasize that the lifting of the trading halt should not be construed as an approval by the exchange of the deferment of the offering and is without prejudice to any regulatory action that the exchange may pursue in order to ensure full compliance with the applicable rules and for the protection of the investing public consistent with the mandate of the exchange, as a self-regulatory organization, to maintain a fair and orderly market,” the PSE said.
The bourse lifted the trading suspension after DITO CME submitted additional information regarding its decision to defer the rights offering.
DITO CME said the decision was a long thought-out process with extensive discussions between the company’s the majority shareholder Udenna Corp. and China Bank Capital Corp., the sole underwriter for the offering. With Jenniffer B. Austria
“After the pricing of the SRO in December 2021, the Philippine financial markets opened on a negative note in 2022 due to the sudden occurrence of events, particularly the COVID-19 Omicron variant surge and hawkish pronouncements of the Federal Reserve,” DITO CME said.
“Hence, with the less than ideal market conditions, the company believes that it has the obligation to ensure that the investment of all its shareholders, including the minority shareholders, are sufficiently protected and that other viable options to raise funds are instead pursued by the company,” it said.
The company said while it is aware of concern of existing shareholders, its main priority is to protect the shareholders, maintain long-term value and preserve confidence in the company’s business.
DITO CME said it would pursue options of relaunching the rights offering, a public offer, or other fundraising means, as soon as market conditions improve, subject to regulators’ approval.
The company said it would start refunding all subscription payments made by existing shareholders or qualified institutional buyers from Feb. 2 to 3. With Jenniffer B. Austria