By Ashley Erika O. Jose, Reporter
PLDT Inc.’s plan to sell at least 49% of its data center business is expected to improve the company’s data center operations and its financial position, according to analysts.
“The sale of a substantial stake in its data center business could significantly improve PLDT’s debt situation, freeing up capital for future investments,” First Grade Finance, Inc. Managing Director Astro C. del Castillo said in a Viber message on Monday.
PLDT plans to sell a 49% stake in its data center business, ePLDT, Inc., to a foreign company for over $1 billion.
“If they get a good valuation for their stake, then that should be positive for PLDT. The sale is expected to generate a windfall that can be used to cut debt and fund capital expenditures,” Chinabank Capital Corp. Managing Director Juan Paolo E. Colet said.
In a regulatory filing, PLDT said its consolidated long-term and short-term debts grew by P141 million to P254.94 billion as of end-March.
PLDT’s decision to partner with a foreign entity in its data center business will enable the company to expand and strengthen its presence in the rapidly advancing fields of technology and artificial intelligence, Mr. Colet said.
With this development, the company will not proceed with its planned real estate investment trust listing for ePLDT.
First Grade Finance’s Mr. Del Castillo said the sale would also make PLDT attractive to investors by improving the company’s debt situation.
“Additionally, PLDT could benefit from the new investor’s data center management expertise and access to more technologies,” he said.
However, the sale presents some challenges such as losing a portion of future revenue generated from the data center, he added.
“The long-term impact on PLDT’s profitability will depend on how effectively it reinvests the proceeds from the sale and manages its remaining assets,” he said.
He also said that there are regulatory risks involved, as the data center industry is relatively new in the country, and the government might impose restrictions on partnerships in this sector.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.
