Below P7? DITO headed for the doldrums as Dennis Uy plans SRO on top of FOO to bankroll DITO's massive capital needs
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Below P7? DITO headed for the doldrums as Dennis Uy plans SRO on top of FOO to bankroll DITO’s massive capital needs

Dito Telecommunity is headed for a stock overhang as its owner, Davao-based businessman Dennis Uy, is planning a multi-billion peso stock rights offering (SRO) on top of its follow-on offering (FOO).

“The company plans to conduct an SRO and an FOO probably in the next six months, both of which may be priced at P7.00 per share or even lower and might create an overhang on the stock,” said Abacus in a recent report.

DITO said it would use the proceeds of the SRO for its massive capital expenditures program while the FOO was needed to comply with the minimum public float following the P68.4 billion share swap with Udenna, which holds Uy’s controlling stake in DITO.

DITO has nosedived by 60 percent to P7.91 on September 20 or seven months after hitting an all-time high of P19. With the release of more shares in the market from the FOO and SRO, DITO could remain in the doldrums for a while.

DITO, a 60-40 joint venture between Uy and China Telecom, launched its operations in March this year and is poised to reach three million subscribers and 3,000 cell towers by the end of this month.

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