MANILA— Philippines’ DITO CME Holdings DITO.PS is in talks with potential investors, including a state pension fund, as it seeks to boost capital, two sources with knowledge of the deal said, sending its shares up as much as 9.5% on Thursday.
Among the potential investors in talks with the listed telecoms conglomerate valued at $706 million was the Philippines’ biggest state pension fund, the Government Service Insurance System (GSIS), said the two sources, who were not authorized to talk to media.
One source said DITO could raise around 8 billion pesos ($137 million), the amount of its planned stock sale that was shelved in January, adding the deal to sell shares is not yet final and an agreement could happen next year.
The prospect of a new investor sent DITO’s shares higher by as much as 9.5% on Thursday, extending a 14% rally on Wednesday. However, its shares are still trading at two-year lows, in line with a broader market downturn. Manila’s stock market index .PSI rose by as much as 1.4% on Thursday.
GSIS did not immediately respond to a request for comment.
DITO’s parent firm Udenna Corp said, “We are not aware of any developments that would affect the share price”.
DITO and Udenna are controlled by Dennis Uy, a close associate and the top campaign donor for former Philippines President Rodrigo Duterte. Uy has been forced to sell assets to pay debts accumulated during a rapid expansion and acquisition spree.
Since launching commercial operations in March 2021, DITO has attracted more than 12 million subscribers, a drop in the bucket compared with the combined 156 million users of the country’s two other networks.
DITO, which is aiming to book a profit by 2026, has committed to investing $5 billion to build thousands of towers and roll out a 5G service.
($1 = 58.39 Philippine pesos)
—Reporting by Neil Jerome Morales; Editing by Kanupriya Kapoor