Globe gets enough funds to settle 2023 debts

MANILA, Philippines — Ayala-led Globe Telecom Inc. has raised enough funds to cover its debt payments next year after it received nearly P10 billion for another round of sale of telco towers.

In a regulatory filing, Globe disclosed that it transferred the ownership of 750 towers to Frontier Tower Associates Philippines for P9.5 billion.

For this tranche, Globe said four in every five of the
towers are situated on the ground, while the others are installed on rooftops.

With this, Globe had disposed of 1,550 out of the 3,259 towers that it signed to Frontier Towers. The mobile giant has closed the sale for about a third, or 2,251, of the 7,059 assets that it included in the largest tower deal in the Philippines

Prior to this, Globe obtained P10 billion for an initial transfer of 800 towers to Frontier Towers in September. Afterward, the firm got P8.4 billion for the closing of 701 assets that it turned over to Manila Electric Co.’s unit MIESCOR Infrastructure Development Corp. (MIDC) in October.

Globe chief finance officer Rizza Maniego-Eala said the Ayala-led telco secured P28 billion in total from closing 32 percent of the tower deal, providing it with enough cover to pay its debts maturing in 2023.

“We are happy that we have successfully completed 32 percent of this record-breaking initiative giving us much leeway to cover for our 2023 debt servicing requirements amid the backdrop of rising interest rates,” Eala said.

“This tower deal will also help us meet the changing consumer demand while ensuring that our network expansion is done in a sustainable and responsible way,” she said.

Globe president and CEO Ernest Cu also said the firm wants to strike strategic partnerships with tower operators in the country.

In August Globe decided to sell more than 7,000 towers to raise at least P91 billion to finance its capital expenditures and pay for outstanding debts. By the end of the transaction, Globe should receive P45 billion from Frontier Towers, P26.2 billion from MIDC and P20 billion from PhilTower Consortium Inc.

For next year, Globe will reduce its capex by 30 percent to $1.3 billion, or around P72 billion, from a peak of P89 billion in 2022.

Cu said Globe plans to maximize the network upgrades it made in the past years, as the firm targets to trim its capex to the $1 billion level by 2024.