Quick takes from around the market
1. AbaCore [ABA 1.11, up 0.9%; 97% avgVol] [link] announced that it has terminated the memorandum of agreement with Greenergy [GREEN 0.40, up 2.6%; 160% avgVol] to build a massive food terminal and logistics center in Batangas. The two companies signed the agreement in March of 2021. No reasons for the termination were provided.
MB quick take: This is why I don’t put a lot of stock in memorandums of understanding or agreement, and especially any coming from ABA. Is ABA terminating the agreement to pivot to a new partner, or are they ditching the project altogether? If I were an ABA shareholder, I’d want to know a lot more about what my management team was up to.
2. PLDT [TEL 1203.00, up 2.8%; 145% avgVol] [link] announced that it has closed on the first tranche of the sale and leaseback deal with Frontier Tower Associates (Frontier), transferring 230 cell towers to Frontier in exchange for P2.8 billion in cash. TEL said that it expects to close on additional tranches of the 1,012-tower deal with Frontier “over the next few months”.
MB quick take: Both Globe [GLO 1790.00, up 0.6%; 60% avgVol] and TEL are smashing that sell button as quickly as they can on their mature tower assets. These sale-leaseback deals are a great way for GLO and TEL to strengthen their balance sheets by converting some long-term/fixed assets into cash. Organizationally, it also allows GLO and TEL to focus more on their core businesses and to back away from the logistical overhead of maintaining these sites all across the country.
3. Union Bank [UBP 66.55, up 3.3%; 69% avgVol] [link] pushed P900 million in fresh capital down to its digital subsidiary, UnionDigital Bank, through the purchase of primary shares. UBP said that the infusion would “support business growth and strengthen [UnionDigital’s] cash position.” The transaction was approved by the BSP on September 26.
MB quick take: Looks like UBP is getting aggressive in the digital loans space ahead of the launch of UnionDigital’s app. UBP said that nearly 70% of its customer base are people of “limited means”, and that this move and the development of UnionDigital’s lending app is intended to “help and include [those people] in
