Corporate News

Globe borrows P7B for capex

Posted on December 06, 2013

AYALA-LED Globe Telecom, Inc. is borrowing P7 billion from a state bank to help fund capital expenditures (capex) next year, the telecommunications firm said in a statement attached to a disclosure yesterday.

A member of the sales staff of a Globe Telecom, Inc. store in Taguig City demonstrates the workings of a smartphone in this photo taken last Jan. 17. -- Jonathan L. Cellona
“Globe Telecom, Inc. signed a seven-year P7-billion term loan with Land Bank of the Philippines,” the statement read.

“Proceeds of the loan will be used to finance Globe’s general and corporate requirements for capital expenditures for 2014.”

The firm has yet to disclose its planned capex for 2014, but had set a budget of up to $500 million for this year to bankroll operations and completion of network modernization. Capex for this year was down about a third from last year, which saw the start of a $790-million network modernization program. The first phase, which cost around $700 million, involved replacement of its old network infrastructure. The second phase covers upgrading of customer solutions.

Around $160 million-$210 million of capex this year had been allocated for “transformation initiatives” while $290 million was to be spent on “business-as-usual investments,” which include provision for fixed-line data investments and international cable facilities, Globe had said in a disclosure in February.

The ayala telco had undertaken successive fund raising earlier this year by:

• signing a three-year $40-million term loan facility with Mizuho Bank Ltd. in July partially to finance capex and prepay expensive debts;

• selling, also in July, P7 billion worth of fixed-rate bonds also to prepay and refinance debts;

• securing in March a $120-million term loan facility from Metropolitan Bank and Trust Co.; and

• in the same month, a $75-million term loan facility from The Bank of Tokyo-Mitsubishi UFJ Ltd. (singapore branch), also to help finance capex.

Globe saw its net income nearly halved to P3.539 billion as of end-september from P6.800 billion in the same nine months last year, as revenues rose 9.83% to P70.325 billion from P64.028 billion, while costs and expenses grew by close to a fifth to P66.304 billion from P55.256 billion.

Shares of Globe shed P16 or 0.97% to close P1,634 apiece yesterday from a finish of P1,650 each last Wednesday. -- LCSM