PLDT loses money in Rocket Internet

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PLDT Inc., the largest telecom company in the Philippines, is selling its shares in Rocket Internet of Germany at a loss.

PLDT announced that indirect subsidiary PLDT Online Investments Pte. would sell 6.8 million shares, or about 67.4 percent of its total number of Rocket Internet shares, for around P10.5 billion.

A report by Rappler stated that PLDT was selling its Rocket Internet shares for P1,545.28 apiece, down from P2,382.71 per share when it bought it four years earlier.

In 2014, PLDT invested 333 million euros or about $445 million (more than P22 billion) for a 10-percent stake in Rocket Internet, putting Rocket Internet’s valuation at about $4.5 billion at that time.

PLDT's stake in Rocket Internet was diluted to 6.1 percent in October 2014, when the German Internet company went public.

PLDT invested in Rocket Internet at a time it launched major startups in Southeast Asia and the Philippines including Lazada, Zalora, Carmudi, Easy Taxi, Lamudi, Food Panda and Traveloka. In 2017, Lazada, the largest company under the Rocket Internet Group, was sold to Jack Ma's Alibaba.

In a statement on April 16, 2018, PLDT said its unit agreed to accept the public share purchase offer of Rocket Internet SE for at least 6.8 million shares. The total transaction for the divestment of 6.8 million shares could be worth P10.5 billion.

Rocket Internet earlier announced the buyback of up to 15,472,912 Rocket shares through a public share purchase offer against payment of an offer price in the amount of 24 euros per share.

PLDT said the final number of PLDT Online tendered shares accepted by Rocket would be determined after the end of the offer period on May 2, 2018.

" If greater than 15,472,912 Rocket shares are tendered, the Rocket shares to be sold by PLDT Online will be reduced proportionally,” PLDT said.

Rocket share prices closed at 21.125 euros as of end-2017, before it fell to 16.03 euros as of end March.

PLDT chairman and chief executive Manuel Pangilinan said proceeds from the Rocket sale would be used to partly finance the company’s P58-billion capital expenditures this year to further expand its fixed and mobile broadband networks.

April 16, 2018

 

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