Ayala-led Globe Telecom has obtained regulatory approval to sell P7 billion worth of long-term bonds.
A Securities and Exchange Commission filing on July 4 showed that the seven-year and 10-year fixed rate bonds will be offered to investors from July 8 to July 12. Investors will also have the option to redeem in whole the outstanding amount starting two years for the seven-year bonds and three years for the 10-year bonds, the filing showed.
Globe intends to list the bonds on the Philippine Dealing and Exchange Corp.
Proceeds will be mainly used to partly finance the company’s capital expenditures related to its IT and network modernization program, which required investments of $790 million. For this year alone, the capital spending budget has been set at $550 million to $650 million.
Based on the filing, proceeds amounting to $210 million will be used for the telecommunication firm’s network and transformation plans. It said another $290 million will be used for investments in fixed-line and submarine cable facilities and other general expenses.
The modernization program is a key component of Globe’s strategy to fuel growth moving forward.
“The modernization program will significantly improve network quality and customer experience, increase capacity, drive down cost, as well as prepare the network to meet the needs of customers today and in the future,” Globe noted.
The company further expects to generate savings in operating expenses and capital expenditures over the next five years on top of added revenues, with the completion of its modernization program.
“The first phase of the network modernization is complete, and the company is now embarking on building more sites to adapt to the changing skyline of the key business districts to further boost coverage, capacity and enhance overall network performance,” Globe added.
Globe’s bond sale was approved by its board last May 29.