Chelsea Logistics and Infrastructure Holdings Corp. (C) claims Dito Telecommunity Corporation (Dito) as an associate with a 25% ownership share. Chelsea Logistics is 70% owned by Udenna Corporation.
On May 10, 2019, the Company subscribed to 40,833,333 common shares and 22,916,666 preferred voting shares or equivalent to 25% interest of Dito’s authorized capital stock for a total amount of P4.1 billion. Out of the subscribed shares, P3.6 billion worth of shares remains unpaid. The unpaid subscription of Dito shares is included in the trade and other payables of Chelsea Logistics as of September 30, 2020.
Under the present Dito shareholder restructuring, Chelsea will keep its 25% interest in Dito albeit indirectly.
The 9M20 of Chelsea showed that Dito Telecommunity’s network and infrastructure build-up comes to a standstill. At the end of 2019 Dito had a total non-current asset of 12.6 Billion Pesos. By the end of the first quarter of 2020 Dito’s non-current asset grew to 17.4 Billion Pesos and by the end of the first half of 2020, Dito non-current assets was at 37.4 Billion Pesos. In just a matter of six (6) months total non-current assets ballooned to 37.4 Billion Pesos. That would be a growth of 3x in a span of 6 months.
However as of September 30, 2020 Dito’s total non-current assets stood at 37.2 Billion Pesos, the same level as of the end of the first half.
That could only mean that Dito Telecommunity’s network and infrastructure roll-out came to a standstill. That could be worrisome as no one knows why the roll-out suddenly came to a standstill. It could be a funding problem or what or that the network roll-out has been completed.
Dito CME Holdings (DITO) is set to acquire Udenna’s 35% shareholdings in Dito Telecommunity in a share swap deal. DITO holders should be aware of Dito’s roll-out progress.
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Disclaimer and Disclosure: This analysis is an independent viewpoint on publicly traded stocks in the Philippine market. Accuretti Systems Inc. trades stocks in the Philippine market.