Globe sells P2 billion tower assets to Aboitiz firm

MANILA, Philippines — Globe Telecom has raised more than P2 billion in proceeds from its sale and leaseback transaction for passive assets with Aboitiz-backed Unity Digital Infrastructure Inc.

In a regulatory filing, Globe said it transferred another set of 55 towers to Unity for a cash consideration of P660 million.

Prior to this, Globe sold 115 units worth P1.4 billion to Unity in July, marking the first batch of towers handed over to the firm.

As of August, Globe has received P2.06 billion from its tower sale with the Aboitiz-led firm. The mobile giant owes Unity at least 277 towers more in the transaction, from which it can draw an additional P3.34 billion to boost its finances.

Globe said it looks forward to the turnover of all the 447 towers bought from it by Unity. Further, the Ayala-led telco said the success of its tower sale would bring in fresh funds that can be used to finance capital expenditures and debt settlement.

“The transaction [with Unity] would result in the availability of funds for Globe to support future capital expenditures, debt repayments and debt avoidance with the expectation of improving the balance sheet health of the company,” Globe said.

As it stands, Globe is struggling to keep profits up on challenges posed by elevated inflation and macroeconomic risks.

For the first semester, Globe’s net income went down by 26 percent to P14.33 billion, as the rise in expenses outpaced the growth in earnings.

For the rest of the year, Globe adjusted its revenue outlook for the service segment, projecting it to just grow in the mid- to low single-digit level. Globe said its clients are suffering from price fluctuations even though inflation has eased since peaking at 8.7 percent in January.

Thus, Globe is cutting its capex guidance to $1.3 billion for 2023 from a record $1.9 billion last year. Likewise, the firm is transitioning to become a tech innovator from just a telco provider to broaden its service offering and widen revenue sources.

In an analysis, Fitch Group unit CreditSights said Globe should be able to raise its credit outlook in the second semester through the liquidation of its passive assets.

“We also anticipate residual P47.2 billion of tower sale closures through the second half of 2023, but with a slim chance of delay beyond 2023, [and] this should boost liquidity and lessen Globe’s need for additional debt insurance,” CreditSights said.