The Philippine Stock Exchange (PSE) has ordered to halt the trading of shares of DITO CME Holdings Corp., the country’s third telecommunications company led by Davao businessman Dennis Uy.
The PSE has also asked the firm to explain why it has deferred its P8-billion stock rights offering (SRO).
“The exchange has required DITO to submit a full and comprehensive disclosure on the foregoing matter within the day [Monday],” the PSE said in its notice.
DITO’s deferment of its SRO, which it was supposed to announce on Friday but was posted on the PSE website on Saturday after regulators deliberated on it, sent shockwaves among the equities trading sector as it was done days after the conclusion of the deal on January 25. Its shares were supposed to be listed on the PSE on February 2.
“We trust that our regulators will handle this development with the protection of those investors in mind, especially since there is a large number of minority shareholders that participated in the offering,” Conrado F. Bate, president and CEO of COL Financial Group Inc., said.
“For now, we should wait for the decision of the regulators on this issue, but we hope that DITO and the PSE can resolve the suspension matter as soon as possible for the benefit of the shareholders impacted.”
DITO’s shares will be suspended for trading indefinitely until it has submitted the necessary disclosure to the regulators—the PSE and the Securities and Exchange Commission.
The company said it deferred the SRO, which allows current shareholders to buy additional common shares of the company, due “to the less than ideal market conditions and other perceived risks.”
The benchmark PSE index may have been down for the most part of January due to the outbreak of the Omicron variant, but it rose 173.38 points to close at 7,296.01 points on Monday.
According to some market players, DITO’s SRO was undersubscribed. “Even if it does not sell, the underwriter has a firm commitment to pick up those shares,” PSE President and CEO Ramon S. Monzon said over the weekend.
China Bank Capital Corp. has been tapped as the sole underwriter for the deal.
Monzon said that the PSE had adjusted the reference price for the stock after the rights offering ex-date.
“What are we going to do? Are we going to adjust the price (again)? How about the investors who sold at a lower price because they thought they would get additional shares from the SRO?” he said.
DITO said the company is studying several alternative financing proposals which are “more value-enhancing” to its shareholders. “When conditions improve, the company may return to the market.”
“Thus, please be advised that the company shall refund any and all subscription payments made by any existing shareholder or qualified institutional buyer during the offer period of the stock rights offer.”
The company is offering a total of 1.64 billion common shares, priced at P4.88 per share. The offer price is an 18.4-percent discount from the closing price as of January 13 and was set at the bottom of its indicative price range.
DITO shares closed Friday at P5.09 apiece.
The PSE said, however, that DITO’s decision “should not be construed as an approval by the Exchange of the deferment of the offering.”
“Furthermore, this is without prejudice to any regulatory action that the exchange may pursue in order to ensure full compliance with the applicable rules and for the protection of the investing public consistent with the mandate of the exchange, as a self-regulatory organization, to maintain a fair and orderly market,” the PSE said.
“The exchange disclaims any liability arising from, or in connection with the foregoing matter. The posting of DITO’s disclosures and the imposition of a trading halt is strictly in view of the materiality of the information and for dissemination purposes only.”
