Globe expected to earn P17B more from sale of remaining towers

Globe Telecom Inc. is seen to earn about P17 billion from the last of its cell sites that it has yet to sell to a tower firm, according to estimates of a Fitch Group unit.

In a report Monday, CreditSights said: “We anticipate Globe’s credit profile to improve over the next six months, as we believe that Globe’s modest [earnings before income, tax, depreciation and amortization] growth and cash infusion from its tower sale and equity rights issue should provide solid financial buffer for capex funding and deleveraging.”

Last week, Globe announced the signing of two agreements for 5,709 of its towers amounting to P71 billion in total.

The credit risk research firm said the entire sale and leaseback for the over 7,000 towers in its portfolio could amount to P80 billion to P90 billion. This is higher than the tower deal entered into by rival PLDT Inc. earlier this year, which was valued at P77 billion.

The first portfolio consists of 2,180 towers in Luzon, which were sold to Manila Electric Co. unit MIESCOR Infrastructure Development Corp. for P26 billion. The second agreement includes the sale of 3,529 towers to Frontier Tower Associates Philippines for P45 billion.

The remaining 1,350 towers are currently in an “advanced discussion” with a tower company. Based on the two earlier deals, each tower could cost P12.4 million.

The Fitch unit noted that Globe’s “hefty” capex for the year of P89 billion would be “sufficiently funded for, which should reduce the need for additional debt incurrence.”