Globe Telecom funds capex with more debt
By Riza T. Olchondra
Philippine Daily Inquirer
First Posted 07:06:00 07/26/2008
Filed Under: Debt Markets, Loan Markets, Telecommunications Services, Company Information
MANILA, Philippines—Exploiting its relatively low debt-to-equity ratio, Globe Telecom Inc. has borrowed anew to fund its capital expenditures for the year instead of dipping into cash reserves.
Head of investor relations, Cherry Tan said in a phone interview that Globe programmed P7.5 billion in debt to fund part of its P19.8-billion capex but deemed it best to take debt to have enough cash for “business opportunities.”
“Companies regularly review their numbers and requirements, and since our debt-to-equity ratio is only 0.58 to one, we don’t have to use our cash since this may be needed later for any business opportunities or new requirements,” she said. “Anyway, we have a lot of room for borrowing, since our target ratio for 2010 is about 1.1 to one.”
Tan said the capex was still programmed for network improvement and expansion. She declined to expound on possible “business opportunities” and “requirements.”
The company earlier said in a disclosure to the stock exchange that it was borrowing P4 billion from Banco de Oro Unibank.
The five-year term loan facility with a floating interest rate was arranged by BDO Capital and Investment Corp.
Globe, a unit of the Ayala group, earlier signed a P2.5-billion five-year loan with Metropolitan Bank and Trust Co., and got P5 billion from Standard Chartered Bank. With editing by INQUIRER.net
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