PLDT, Inc. · PSE:TEL
PLDT — Merger or Acquisition (April 2022)
18 slides from PLDT's merger presentation, Apr 19, 2022
Slide 1: Pioneering tower sharing in the Philippines
Pioneering tower sharing in the Philippines Sale and leaseback of towers for PHP 77 billion 19th April 2022
Slide 2: Meeting all the key objectives
Meeting all the key objectives Key objectives Better network quality Valuation Capital and efficiency, uplift reallocation higher resilience, faster recovery Benefit the country by supporting digital infrastructure sharing 2
Slide 3: Landmark sale and leaseback of towers in the Philippines
Landmark sale and leaseback of towers in the Philippines Sale and leaseback of 5,907 telecom towers for PHP 77 billion 1 Sale of 5,907 telecom towers for PHP 77 billion Portfolio 1 PLDT 2,934 towers to be sold to a subsidiary of EdgePoint (Comworks Infratech Corp.) for PHP 35 billion 1 Sale Portfoli
Slide 4: Only passive infrastructure is transferred
Only passive infrastructure is transferred PLDT retains ownership of active infrastructure; TowerCos to own the passive infrastructure Antennas Active infrastructure (retained by PLDT/Smart) Remote radios Passive infrastructure (to be acquired by TowerCo) Microwave dish Tower steel structure Shelter
Slide 5: Monetization of complementary tower portfolios
Monetization of 2 complementary tower portfolios Approximately half of PLDT/SMART’s tower portfolio to be monetized Total Portfolio 1 Portfolio 2 Metro Manila Visayas1 Metro Manila 8% 16% 18% Metro Manila 28% Mindanao Luzon 2,934 33% 2,973 Geographical Mindanao 5,907 ex Metro breakdown 17% sites sit
Slide 6: Highly experienced international TowerCo partners
Highly experienced international TowerCo partners edotco Group EdgePoint Over 54k owned and managed towers Telecom tower platform in Asia Backed by DigitalBridge: ▪ Dedicated global-scale digital Present in 9 countries Pakistan infrastructure firm ~10k towers in Indonesia and Malaysia ▪ US$ 45bn of
Slide 7: Favorable leaseback terms
Favorable leaseback terms Key terms Benefits to Smart Tenor 10 years ✓ Long-term guaranteed use of the towers by Smart Currency PHP ✓ No FX risk Monthly base PHP 100k / tower / month ✓ In-line with running costs for PLDT/Smart rate charge (PHP 70k base fee1 and PHP 30k O&M fee) ✓ Lower than current
Slide 8: Leaseback rate considerations
Leaseback rate considerations Monthly base rate charge in line with running costs and appropriate considering services being received ▪ The PHP 100k/tower monthly base rate charge for the sale Philippines Indonesia USA and leaseback is in-line with the running costs for Smart, Transaction which incl
Slide 9: Superior valuation achieved
Superior valuation achieved Attractive EV/EBITDA multiple of 20x attained for both portfolios Significant premium over book value Highest EV/EBITDA multiple2 Highest value per tower2 (PHP billion) (PHP million per tower) Purchase Transaction 20x Transaction 13.0 price 77 Protelindo - STP ~14x Protel
Slide 10: Positive accounting impact on PLDT
Positive accounting impact on PLDT Significant gain on sale, EPS accretive transaction Significant gain on sale Earnings uplift (PHP bn) (PHP bn) Pre-sale Post-sale2 Difference Selling price 77 Expenses1 (7.0) (5.7) +1.4 Less: Net assets sold (23) Savings on financing costs - 2.6 +2.6 Gain on sale 5
Slide 11: Use of proceeds
Use of proceeds 1 Debt prepayment ▪ Debt reduction of PHP 27.5bn ▪ Net debt / EBITDA expected to go below 2.0x + Savings on financing costs Cash ▪ Estimated at proceeds1 2 Fund major cash requirements in 2022 PHP 2.6bn p.a. ▪ Avoidance of additional debt of up to PHP 24.5bn 3 Special dividends ▪ Up
Slide 12: From signing to closing
From signing to closing Signing (Today) Closing Satisfy conditions to closing1 ▪ Staggered closing based on number of towers being transferred ▪ First closing expected in May 2022 with final closing by Q4 2022 Note: 1. Landlord consents / land lease renewals 12
Slide 13: Thank you
A@PLDT Asmart Thank you
Slide 14: Appendix
Appendix
Slide 15: Accounting impact
Accounting impact Sale and leaseback (“SLB”) ➢ Gain to be recognized by seller-lessee to reflect the amount relating to the rights transferred over the asset to the buyer-lessor. ➢ Entity first needs to determine the rights retained via the leaseback – as represented by the present value of the leas
Slide 16: Accounting impact – balance sheet
Accounting impact – balance sheet Balance sheet impact (PHP bn) Pre-sale Post-sale Movement Present value of lease liability to be recognized post-sale at PHP 35.3bn PPE 23.1 - (23.1) ▪ Tower assets at PHP 21.2bn Right-of-use assets 7.6 17.6 10.0 ▪ Land at PHP 14.1bn Cash - 77.0 77.0 Assets 30.7 94.
Slide 17: Forward-looking statements
Except for historical financial and operating data and other information in respect of historical matters, the statements contained herein are “forward-looking statements” within the meaning of Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchang
Slide 18: (APLDT
(APLDT