Sou Hu Cai Jing·2025-06-11 01:46Core Viewpoint - DITO CME Holdings faces significant financial pressure due to Philippine laws restricting foreign ownership in telecommunications, which has led to an increase in debt and delayed financial actions [2][4]. Group 1: Financial Constraints - DITO CME's debt has surged as a result of the inability to convert shareholder loans from China Telecom into equity, due to the legal cap of 40% foreign ownership in telecom companies [2][4]. - As of March 2025, DITO Telecom's capital shortfall has expanded to 78.04 billion pesos, worsening from 73.39 billion pesos at the end of 2024 [4]. Group 2: Ownership Structure - DITO CME has transferred majority control to Singapore's Summit Group, which will subscribe to up to 9 billion common shares [5][6]. - Current ownership includes Udenna Corp. at 49.79%, Summit Telco Holdings Corp. at 15.36%, and Summit Telco Corp. Pte. Ltd. at 7.4%, with the remainder held by the public [6]. Group 3: Financial Losses and Challenges - The inability to convert loans to equity is one of several factors contributing to DITO CME's negative assets and ongoing losses, including high initial investments, foreign exchange losses, and significant depreciation expenses [7]. - The company plans to invest a total of 256.54 billion pesos in network construction over five years, leading to substantial upfront capital burdens [7]. - DITO CME reported a total loss of 41 billion pesos in 2024, primarily attributed to "non-cash" accounting treatments, which is common in the early stages of telecom development [7]. Group 4: Future Plans - Despite financial challenges, DITO CME is advancing its capital restructuring plan, aiming to raise 28.83 billion pesos by 2028 [8]. - China Telecom has committed to matching any fundraising efforts by DITO CME, whether through new equity injections or converting existing loans into equity [8].