What a disaster.
Davao-based businessman Dennis Uy has decided to scrap DITO CME Holdings’s P8 billion stock rights offering (SRO) because investors avoided his telecommunications firm like the plague.
In a deleted tweet by Inquirer reporter Miguel Camus, DITO president Eric Alberto said the SRO was canceled due to “weak demand and poor market conditions.”
Alberto said DITO might relaunch the offering in the third quarter of 2022, or after Uy patron President Rodrigo Duterte, has ended his term in office.
Alberto said that the few who subscribed to the SRO would be refunded “at the soonest possible time.”
— stocktraderspilipinas (@stocktradersph) January 28, 2022
DITO’s SRO already had the makings of a disaster as early as 27 December 2021 when Uy started taking offers for 1.64 billion shares of the company’s new shares at P4.88 each.
DITO even extended the offer period from January 18 to January 25 “due to numerous requests from shareholders who were unable to subscribe to the offering nor receive their SRO kits on time due to logistical difficulties brought about by the surge of COVID-19.”
Still, despite taking nearly a month to sell its shares, DITO could still not find any takers for its SRO.
DITO closed at P5.18 at the end of the SRO period on January 25, the same price on its ex-rights on December 20.
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DITO traded between P5.96 and P4.90 during the SRO period. The SRO price discount apparently was not compelling enough for investors.
DITO’s sole underwriter is China Banking Corp. which has a P6 billion loan to Uy’s debt-burdened PH Resorts Group which is struggling to finish its Cebu casino hotel project.
DITO CME owns 54 percent of DITO Telecommunity which won the bidding for the third telco player franchise because all other bidders were disqualified.
It planned to use the SRO proceeds for its goal to reach 70 percent of the country’s population by July 2022 from 53 percent as of the third quarter of 2021.