Globe gets $40-M term loan
Funds to be used in prepaying certain obligationsBy Miguel R. Camus |Philippine Daily Inquirer
Globe Telecom Inc. sealed a three-year $40-million term loan facility with Japan’s Mizuho Bank Ltd., a disclosure to the Philippine Stock Exchange showed.
The company said proceeds would be used to prepay and refinance certain debts, said Globe chief financial officer Alberto de Larrazabal.
“The loan will help us generate savings,” Larrazabal said, noting “the favorable environment in the debt market.”
Globe shares rose 0.25 percent to P1,635, giving it a market value of P216.7 billion as of yesterday.
The company last raised funds through the sale of long-term bonds, raising about P7 billion this month.
Proceeds from the sale were used to partly finance the company’s capital expenditures related to its IT and network modernization program, which required investments of $790 million.
Globe had programmed a capital spending budget of $550 million to $650 million for 2013.
It said $210 million would be used for its network expansion and transformation plans. It said another $290 million was earmarked for investments in fixed-line, submarine cable facilities and other general expenses.
The modernization program is a component of Globe’s strategy to fuel growth as it faces stiff competition from rival Philippine Long Distance Telephone Co.
Globe reported in May that first quarter net income declined by 76 percent to P656 million although core net income was up by 13 percent to P2.7 billion. It said service revenue rose by 6 percent to P21.4 billion.
The company attributed the net income drop to the competitive environment and the accelerated depreciation charges associated with its modernization program.
Globe is the telecommunications arm of conglomerate Ayala Corp., which is also involved in property development, water distribution, banking and electronics manufacturing. The Ayala group recently ventured into power generation and transport infrastructure.