NOW to raise $50 M to boost broadband business

MANILA, Philippines – Listed information technology (IT) firm NOW Corp. is raising $50 million over the next two years to build up its broadband business targeted for enterprises.

NOW Corp. president and chief executive officer Mel Velarde said the company signed the agreement with one of the country’s top local banks late last month.

He said the bank would serve as the arranger as the company is raising a “minimum of $30 million up to a maximum of $50 million and it would be quasi-equity.”

The $30 million would be spent for building its network including deployment of fiber optic cables this year, and another $10 million would be used each year for the next two years.

“The money is scheduled to come in within 90 days as part of the mandate (given to the bank),” Velarde said.

The funds being raised form part of the company’s five-year plan which seeks to grow gross revenues to $345 million and net income to $120 million by July 2021 from the broadband and cable television business provided to enterprises.

Last year, the company had gross revenues worth over P100 million and net profit of P5 million, a turnaround of losses incurred in the previous years.

Velarde said NOW is focusing on enterprises as the big telco players Philippine Long Distance Telephone Co. and Globe Telecom Inc. are currently not able to meet all of their requirements.

NOW provides bundled services such as software systems, security solutions, broadband connectivity and even wireless cable TV to enterprise clients.

The company is able to offer wireless cable TV services through partnerships with cable TV firms.

While NOW is looking to expand in other cities such as Cebu, Davao, Dagupan, Baguio, Bacolod, Clark and other next wave cities for business process outsourcing, the company is focused on increasing its footprint in Metro Manila first.

Velarde said the company expects to start expansion to areas outside of Metro Manila in the third year of implementation of its business plan after generating revenues and net profit from operations in the National Capital Region.