Globe Telecom starts $100-M bond offer

Ayala-owned Globe Telecom Inc. has started a global bond offering to raise about $100 million for the company’s capital build-up for its wireless phone business.

Globe vice president for legal services Ma. Caridad Gonzales informed the Philippine Stock Exchange that around 6.41 million in Philippine Deposit Receipts (PDRs) – an instrument which could later be converted into common shares – have been floated through a combination of domestic and international offerings.

Priced at P725 each, the PDRs will be placed under Globe Telecom Holdings Inc., a special purpose vehicle formed for the bond float. This scheme could be likened to the spin-off of ABS-CBN Holdings last year to effect the sale of the broadcast giant’s own PDRs.

GTHI will be jointly owned by Globe Telecom, parent firm Ayala Corp. and its foreign partner Singapore Telecom International Pte. Ltd.

As in the case of ABS-CBN, Globe resorted to a PDR offering to generate funds from international investors, who would otherwise be legally constrained to limit their holdings to 40 percent of a local telecom company.

The entire PDR float consists of 5.362 million in international listing and 1.047 million in domestic offering. Earlier, Globe completed an initial exchange where stockholders tendered 4.43 million common shareholders into PDRs, bringing the total outstanding PDRs to 10.84 million.

"Holders of Globe common shares will continue to have an opportunity to exchange their shares into PDRs at subsequent exchange following listing and commencement of trading of the PDRs," Gonzales said.

The Philippine Stock Exchange yesterday suspended trading for Globe’s common shares and warrants until after the end of the domestic PDR offering on Oct. 10. The PDRs, meanwhile, are expected to list and begin trading on Oct. 16.

Globe shares stood at P790 as of Oct. 5.