Globe signs P2-B term loan facility with Metrobank

Ayala-owned Globe Telecom has signed a P2-billion term loan facility with Metropolitan Bank and Trust Co. (Metrobank). Proceeds will be used to finance capital expenditures and permanent working capital requirements.

The company has drawn up a 2004 capital expenditure budget of $350 million, of which $260 million will be spent on new projects and the balance on programs started in 2003 and scheduled for completion this year.

Earlier, Globe officials said the company was preparing to take $150 million in five-year loans to finance its capital expenditures this year.

Globe chief financial officer Delfin Gonzalez said $100 million will be in the form of a syndicated loan to be underwritten by Standard

Chartered Bank, BNP Paribas and Sumitomo Mitsui Banking Corp. The loan will be drawn in the third quarter of this year.

The Metrobank loan, sources said, will finance the balance of $50 million and will be a five-year loan.

Gonzales said Globe planned to settle up to $175 million of its outstanding bonds due in 2009.

The company has not scheduled any bond offering for this year.

He said they will get $100 million from bank financing and $75 million from internally-generated funds (to pay the loan), adding that Globe had raised some P3 billion and $50 million came from a club loan signed with Credit Lyonnaise and DBS Bank.

Due to a combined top-line growth and increased operating efficiency, Globe registered a net income of P3.1 billion during the first quarter this year.

This year, Globe has earmarked about P19.7 billion for its capital expenditures program, primarily for the expansion of its wireless business. Capex for the first quarter amounted to P4.3 billion, equivalent to 33 percent of service revenues.

Its service revenues, which were driven by the growth in subscribers in the first quarter, amounted to P12.8 billion, a 16-percent increase from the same period in 2003.The company’s total wireless subscriber base reached 9.1 million as of March this year, an increase of 29 percent over that of a year ago.

Earnings before interest, taxes, depreciation and amortization (EBITDA) went up to P8.3 billion and EBITDA margin improved to 65 percent.

"We are pleased with our financial performance in the first quarter as it reflects both growth and the solid operational strength of our underlying business. We continue to be optimistic over the potential of the wireless market in the Philippines and we are well poised to take advantage of growth opportunities," Globe president and chief executive officer Gerardo Ablaza Jr. said.

"Our main challenge moving forward lies in ensuring the Globe provides a service that is increasingly attractive and relevant to the mass market – which is where the growth is coming from," he said.

Globe’s total asset base was at P140.9 billion, with total debt going down by three percent from the previous year to P55.4 billion as of March 31, 2004.

Globe said its free cash flow was strong at P3.5 billion, 41 percent higher than the P2.5 billion recorded during the first quarter last year.