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DITO CME proceeds with acquisition of indirect stakes in 3rd telco

Listed DITO CME Holdings Corp. has proceeded with its plan to have indirect hold of “third telco” DITO Telecommunity Corp. through a share-swap deal, a move seen as a possible backdoor listing of the new major telecommunications player.

In a disclosure to the Philippine Stock Exchange, DITO CME - formerly ISM Communications - said the “definitive documents pertaining to the transfer by Chelsea Logistics and Infrastructure Holdings Corp. and Udenna Corporation of their combined 60% share ownership in DITO Telecommunity to DITO Holdings Corporation were executed [today], 11 November 2020.”

The company said that the share-swap transaction between Udenna and Dito CME, wherein Dito CME shall acquire 100% of the issued and outstanding capital stock of Udenna Communications Media and Entertainment Holdings (UCME) in exchange for the issuance of 11,200,000,000 new shares of DITO CME taken from an increase in its authorized capital stock, was also executed on November 11.

“The final issue price by DITO CME is P6.11 per share for a total issue consideration of P68,432,000,000.00,” it said.

The company earlier said the objective of the acquisition is for the DITO CME to hold “indirect interest in DITO Telecommunity Corporation, the entity that was named the New Major Player in the telecommunications industry.”

“This is one step of our plan of realizing DITO CME’s ownership of DITO Telecommunity, through Udenna CME and DITO Holdings Corp. DITO CME will end up as the beneficial owner of the Udenna Group’s equity interests in DITO Telecommunity, excluding those under Chelsea Logistics and Infrastructure Holdings Corporation,” said DITO CME president Eric Alberto.

Udenna CME is the corporate vehicle that will hold Udenna Corp.'s shares in its telecommunications business.

Udenna CME shall indirectly own Udenna Corp.’s shares in DITO Telecommunity upon completion of its plans to transfer its shares to DITO CME.

DITO CME said the share-swap transaction, the increase in authorized capital stock, and the issuance of 11,200,000,000 shares will be subject to the approval of the Securities and Exchange Commission (SEC).

“We shall promptly update the Exchange once the approval is obtained,” it said.

In 2018, DITO - formerly Mislatel Consortium - was declared as the country’s new major player after a tedious selection process wherein bidders submitted service commitments to the government.

DITO is composed of Udenna Corporation, Chelsea Logistics and Infrastructure, and China Telecommunications Corporation.

As part of the conditions in its Certificate of Public Convenience and Necessity, the company committed 27 megabits per second (Mbps) internet speed and at least 37% of population coverage in its first year of operation. DITO is targeting to commercially launch or onboard subscribers in March 2021.

In its fifth year of operation, the third telco committed 55 Mbps internet speed and 84% population coverage.

Should it fail to meet its commitments DITO will lose its P24-billion performance bond in favor of the government.—AOL, GMA News