(Bloomberg) -- PLDT Inc. is considering the sale of a significant minority stake in its data center assets, according to people familiar with the matter, as the Philippines’ largest telecommunications firm grapples with the fallout from a spending scandal.
The company is working with financial advisers as it weighs bringing in an investor into its data center business, the people said, asking not to be identified because the matter is private. A transaction could value the business at $700 million to $800 million, the people said.
Bringing in a partner would help the company raise cash and further develop its business, the people said. PLDT had weighed a sale of the data centers in 2021, Bloomberg News reported at the time. The process was put on hold, the people said.
Discussions are preliminary and the company could decide against a deal, they added. The company is not considering a stake sale “as of the moment,” Mitch Locsin, PLDT’s first vice president and head of enterprise said in response to a query from Bloomberg News. The company’s information technology unit is currently focused on the completion of its hyperscaler 11th data center, he added.
The nearly 100-year-old company is facing local investigations and a shareholder lawsuit in the US related to a 48 billion peso ($871 million) spending overrun discovered in an internal audit last year. PLDT has said it found no fraud, anomalies, evidence of overpricing or unrecorded transactions related to the overrun. It is holding talks with four vendors to cancel projects and seek discounts.
Shares in PLDT plunged by a record 19% in a single day following the spending disclosure, and are down 26% in the past year, valuing the company at about $5.3 billion.
PLDT is looking at selling telecom towers in 2023 to offset the impact of the capital spending exceeding its budget, it has said. Last year, PLDT sold half its telecom towers for about $1.3 billion in two portfolios to units of Edotco Group Sdn. and EdgePoint Infrastructure. It’s also considering selling an additional few thousand towers for about $300 million, Bloomberg News has reported.