Globe Telecom to raise P10B

The Securities and Exchange Commission has approved the plan of Ayala-led Globe Telecom Inc. to raise as much as P10 billion from a public offering of preferred shares.

Based on SEC documents, Globe obtained the clearance to register up to 20 million in new non-voting perpetual preferred shares at an offer price of P500 a share.

These securities are proposed to be listed and traded on the main board of the Philippine Stock Exchange.

Of the total shares, 14 million will compose the base offer while six million will be for the oversubscription option.

Proceeds from the issuance are expected to help cover Globe’s 2014 capital expenditures amounting to as much as  $650 million.

Globe also disclosed Wednesday that its core profit, which excludes the impact of the nonrecurring items, such as the accelerated depreciation charges related to its modernization program, rose 18 percent to P7.6 billion from January to June this year.

A stock exchange filing showed that revenues in the first half totaled P47.7 billion, 7 percent higher than the level reported in the same period last year.

Net profit stood at P6.8 billion, almost a fourfold increase from P1.4 billion a year earlier, Globe said.

“Our transformation initiatives are starting to bear fruit, given the solid revenue momentum we sustained this quarter. We approach the second semester of 2014 with confidence that, with our modernized network and our commitment to innovation and customer service excellence, we can maintain the growth momentum for the balance of the year,” Globe president and CEO Ernest Cu said in the statement.

About a third of the company’s capital spending budget for 2014 is related to trailing payments for the network and IT modernization programs undertaken in prior years.

Another third is earmarked for the expansion and increase in capacity of its data network, including continued investments in LTE (long-term evolution or 4G) and fixed broadband.