(Bloomberg) — PLDT Inc., the largest Philippine phone company, sank 17% in Manila trading after saying it will revamp management following an internal audit that uncovered 48 billion pesos ($866 million) in capital spending overrun in the past four years.
Most Read from Bloomberg
The stock fell as much as 17% to 1,230 pesos, its steepest loss since March 2020. The company is headed for its sixth straight day of declines. The company’s US-traded depositary receipts sank 2.4% on Friday, when PLDT announced the budget issues.
The spending probe casts a stain on the finances and governance of PLDT, which is among the nation’s most widely held stocks by foreign investors. It also raises questions about the management of PLDT Chairman Manuel Pangilinan, who was president and CEO until 2021.
“The core issue here and the primary reason PLDT is getting sold down is corporate governance,” said Manny Cruz, strategist at Papa Securities. “The overrun is quite a substantial amount and it went on for years that raises questions on how that could have happened to a blue chip company?”
The budget overrun is almost equivalent to the company’s combined 2020 and 2021 net income. It’s also more than twice the 21.46 billion pesos of cash and cash equivalents that PLDT reported at the end of last quarter.
The Philippine Stock Exchange will look into trades involving shares of PLDT after bourse officials noticed heavy selling before the market closed Friday and an hour before the company disclosed the overrun, the Philippine Daily Inquirer reported, citing PSE President Ramon Monzon.
PLDT’s shareholders include Nippon Telegraph & Telephone Corp., Hong Kong’s First Pacific Co. and Manila-based JG Summit Holdings Inc.
Several other companies of which Pangilinan is also chairman declined. Metro Pacific Investments Corp., owned by First Pacific, sank as much as 5.4%, while Manila Electric Co., fell as much as 3.3%. Philex Mining Corp. was down more than 1%, set for its third straight day of declines.
(Updates with shares moves and analyst comment in fourth paragraph.)
Most Read from Bloomberg Businessweek
©2022 Bloomberg L.P.
Credit: Source link
