Globe taps Metrobank for $120-M loan

MANILA, Philippines - Globe Telecom Inc., a joint venture between conglomerate Ayala Corp. and Singapore Telecom, has tapped Metropolitan Bank and Trust Co. (Metrobank) for a $120-million loan facility to bankroll its expansion program.

In a disclosure to the Philippine Stock Exchange (PSE), Globe said proceeds of the loan facility would be used to finance the company’s capital expenditures, including the ongoing network modernization and transformation program as well as investments in fixed line, international cable facilities, and information technology infrastructure.

Early this month, Globe inked a $75-million loan with The Bank of Tokyo – Mitsubishi UFJ Ltd to partially fund the company’s capital expenditures of between $450 million to $500 million this year.

“The term loan facility with Metrobank brings to $195 million the total loans signed by Globe for the first quarter of the year,” the company told the PSE.

Globe has earmarked up to $500 million consisting of $160 million to $200 million for transformation initiatives and $290 million for investments in fixed lines, international cable facilities, and IT infrastructure.

Globe chief financial officer Alberto de Larrazabal earlier said this year’s capital expenditures would be funded through a combination of internally generated funds and debt.

De Larrazabal said Globe is looking at several fund-raising activities including the issuance of detailed peso bonds, bilateral peso loans, among others to raise between $320 million and $350 million of the total amount.

Globe is scheduled to complete the first phase of its $700-million network modernization and transformation program this month and is also expected to start its $90-million IT upgrade this month.

The company’s net income dropped 30 percent to P6.857 billion last year from P9.832 billion in 2011 as earnings plunged 97 percent to P49 million in the fourth quarter from about P1.8 billion a year earlier.

The decline in net income was traced to higher expenses brought about by the 54 percent rise in capital expenditures as well as 86 percent jump in subsidies allowing subscribers to acquire new phones such as the iPhone5 at a lower cost.

The company’s revenues went up six percent to an all-time high P82.742 billion last year from a year-ago level of P77.76 billion.