Globe taps insurance firms for P2B fixed-rate notes
Ayala-led Globe Telecom has tapped three of the biggest insurance firms operating in the Philippines for fresh funds to help fund $700 million worth of upgrades to make the company’s network the most modern in the country.
In a statement on Tuesday, Globe Telecom, which has a third of all mobile phone users in the country, said it signed a long-term fixed-rate note facility for P2 billion with Philippine American Life and General Insurance Co., Insular Life Assurance Co. and Sunlife of Canada (Philippines).
“Proceeds of the loan will be used to refinance a portion of the company’s debts as well as to fund capital expenditure requirements for 2013,” Globe told the local bourse.
The 10-year loan facility was arranged by Insular Investment Corp.
“We want to take advantage of the current low-interest rate environment to fund capital expenditure requirements for next year and refinance our loans,” Globe chief financial officer Alberto de Larrazabal said.
Globe Telecom’s ongoing network modernization has an estimated total cost of $700 million.
Article continues after this advertisementOnce completed, the new network will have a digital architecture as well as 12,000 additional kilometers of fiber optic cable capacity to handle the expected increase in voice and data traffic and the capability to upgrade to more advanced technologies.
Article continues after this advertisementThe new network is also designed to reduce the costs of operating, maintaining and upgrading as the company shifts toward more power-efficient equipment and adopts more green solutions that will further reduce its carbon footprint and energy consumption.
Globe Telecom expects to complete its network modernization, which involves the complete replacement of all field equipment, by early 2013. Aside from increased voice and text traffic, the new network is expected to cope with the exponential rise in broadband Internet usage.
Globe, owned by local conglomerate Ayala Corp. and the SingTel group of Singapore, ended the first semester with 31.7 million subscribers, up 12 percent year on year.
