Dennis Uy’s Dito CME Bleeds 15.4 Billion Pesos and Eliminates Debt Nervousness

Dito CME has short-term loans amounting to $1.3 billion, or about 72 billion pesos. The company is optimistic about its ability to get out of debt and take on long-term loans.

MANILA, Philippines — Dito CME, Dennis Uy’s holding company for the third-largest telecom operator and other technology interests, reported losses of 15.4 billion pesos in the first half of 2022, higher than losses of 3.8 billion pesos in 2021, as foreign exchange losses and expenses skyrocketed over the period.

A Tuesday, Aug. 16, stock release showed Dito CME’s revenue increased tenfold to 3 billion pesos, while earnings before interest, taxes, depreciation and amortization rose 26% to 2.79 billion pesos.

Dito CME President Eric Alberto said, “We continue to move forward and are very pleased with our investment in Dito Telecommunity. Dito’s strong mobile subscriber growth in just over a year and a quarter after commercial launch is proof that there is still a segment of the market that prefers simple, fast and reliable telecommunications services.

The company attributed the revenue growth to third-largest telecommunications player Dito Telecommunity, which had 9.6 million subscribers at the end of June.

Shares of Dito CME fell 0.5% after the earnings release.

The woes of debt

Investors have long worried about Uy’s investments, as he had sold his previous acquisitions due to massive debt. (READ: Dennis Uy pays, avoiding the default domino)

In June, Dito CME’s bank loans amounted to P64.6 billion. Non-current liabilities or loans not due within the next 12 months amounted to 16.65 billion pesos.

Dito CME’s documents also showed that its current liabilities exceed its assets by 149.9 billion pesos. First-half losses amounting to 15.4 billion pesos resulted in a capital shortfall of 18 billion pesos.

“These conditions indicate that there is a material uncertainty that could cast significant doubt on the Group’s ability to continue as a going concern and, as a result, the Group may be unable to realize its assets and discharge its liabilities within the normal course of business. Despite these conditions, management believes that the Group will be able to meet all of its outstanding obligations and continue to operate as a going concern,” Dito CME said in its filing.

Dito CME currently has loan agreements with Bank of China Limited-Singapore Branch ($300 million), China Minsheng Banking Corporation ($500 million), Bank of China ($450 million) and Bank of China-Manila ( $50 million).

These short-term loans, amounting to $1.3 billion or 72.7 billion pula, were originally due to mature within the year, but some have been negotiated to be paid in 2023.

“Of the $1.3 billion in loan facilities with various financial institutions, $1.18 billion has been drawn and all originally had maturity dates from April to October of this year,” said Dito CME.

Dito Telecommunity added that it has renewed its $500 million loan facility with China Minsheng Banking Corporation through May 2023, while loan facilities with multiple Bank of China branches totaling $800 million are in place. course of finalization or will be renewed before the due dates.

Dito CME’s Chief Financial Officer, Joseph John Ong, said: “We are confident that the bridge loan facilities will be renewed until these loans are converted into our long-term loans arranged with the same creditor banks.” – Rappler.com

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