PLDT not in hurry to fully divest from Rocket Internet

MANILA, Philippines – PLDT Incorporated is not in a hurry to dispose of all of its shares in Rocket Internet SE, as it banks on the optimistic prospects of the Berlin-based tech investor’s financial perfomance in the coming months.

This comes after the listed telecommunications giant announced on Monday, April 16, that its indirect subsidiary, PLDT Online Investments Private Limited, will accept the public share purchase offer for at least 6.8 million of its Rocket Internet shares, or about 67.4% of the total number it directly holds. 

PLDT is seen to get about €163.2 million (P10.51 billion) in the sale of bulk of its Rocket Internet shares. This will be used to partly fund its historic high capital spending budget of P58 billion for 2018. 

Asked if PLDT is looking at fully divesting from Rocket Internet, its chairman and chief executive officer Manuel Pangilinan said his group is not rushing to sell the remaining 32.6% of its total Rocket Internet shares.

“There’s no pressure on the part of PLDT to dispose [of] the remaining one-third,” Pangilinan told reporters on the sidelines of Smart and YouTube’s partnership launch in Pasay City on Tuesday night, April 17.

“I think we just have to take it from there because it’s a short time window and I think their offer closes [on] May 2, so let’s see how the take-up would be. The plan is two-thirds [of shares] would be taken up by the offer. Beyond that, I think we just have to play [it] by ear,” he added.

From Pangilinan’s perspective, the value of Rocket Internet “is still important” for PLDT.

“The bias, I’d like to think, is that given the prospects for Rocket Internet, the bias is share price should improve in the long term,” the PLDT chief told reporters.

Aggregate revenue across the selected companies of Rocket Internet grew by 28% in 2017, from a “disappointing” performance in 2016.

Because of Rocket Internet’s performance, PLDT booked P5.4 billion in impairment charges in the 1st half of 2016.

It was in August 2014 when PLDT invested €333 million ($362 million) for a 10% stake in the German firm – the Philippine telco’s biggest overseas investment to date. It was then diluted further to a 6.1% ownership stake.

Rocket Internet’s most prominent brands include leading Southeast Asian e-commerce businesses Zalora and Lazada.

PLDT’s bottom line has been declining for 4 straight years since 2013 due to its “digital pivot.” 

In 2017, PLDT saw a flattish core income of P27.688 billion, from P27.857 billion in 2016. – Rappler.com