Globe secures $155-M loan to fund expansion

Globe Telecom is tapping fresh debt to fund this year’s capital spending program, most of which will be used for internet service-related initiatives.

Globe said in a stock exchange filing Friday that it had signed a $155-million seven-year and 10-year term loan facility with Metropolitan Bank and Trust Co.

As noted, the debt would help pay for the expansion of the company’s data infrastructure rollout. As of the first semester of 2017, Globe said it had spent around $550 million.

This represents a big slice of the full-year budget of $750 million. Globe said it was looking at the “possibility” of increasing its spending this year by another $50 million to $100 million.

“The progress of capex deployment in the third quarter of the year will determine whether Globe management will seek additional capex approval from the board,” Globe said in its filing.

The spending drive, and expenses related to the acquisition of San Miguel Corp.’s telco unit, had cut into Globe’s bottom line as of the first semester of 2017.

Globe said early this month that core profit from January to June was down 10 percent to P8 billion while total service revenues—led by mobile and fixed-line internet—went up by 5 percent to a record P62.9 billion.

Earnings took a hit from higher depreciation charges. Globe said it spent more to rollout telco infrastructure following the acquisition on May 30, 2016 of SMC’s Vega Telecom.

Moreover, it cited equity losses and spectrum amortization, given its expanded frequency assets.

The telco, held by Ayala Corp. and Singapore Telecommunications, said depreciation expenses in the first half of 2017 jumped 14 percent to P13.1 billion.

Removing the impact of the SMC deal, Globe said net income would have been down 4 percent during the six-month period. —MIGUEL R. CAMUS