Philippines-based operator PLDT announced it will sell the majority of its shares in Rocket Internet as part of a plan to offload assets to fund a planned increase in capex over the next three years.
Rocket Internet, a Germany-based internet and technology company incubator, announced it will buy back up to 15.47 million shares through a public share purchase offer at €24 per share. PLDT, through its PLDT Online unit, holds a 6.1 per cent stake in Rocket Internet. In a statement PLDT said its subsidiary will sell at least 6.8 million shares, or nearly 68 per cent of its stake valued at €163.2 million, back to Rocket Internet.
PLDT, the parent company of mobile operator Smart Communications, in January earmarked up to PHP178 billion ($3.5 billion) to expand and upgrade its mobile and fixed networks over the next three years, with 2018 capex expected to be more than PHP50 billion and stay at that level for two years.
In response to increasing expectations and criticisms being levelled against the industry about network quality, PLDT said in November 2017 it was considering increasing its 2018 capex to a higher level than its original guidance of PHP46 billion for 2017. It said at the time while it believes it could support the PHP46 billion level through its operating cash flow, any “higher amount would have to be funded from other than additional debt, possibly through a sale of assets”.
The statement went on to say the final number of tendered shares accepted by Rocket Internet will be determined after the offer period which is expected to end on 2 May.
PLDT acquired a 10 per cent stake in Rocket Internet for €333 million in August 2014, but the operator declined to subscribe to later fundraising rounds so its stake was diluted to 6.1 per cent.