Globe taps PNB for P7-B capex loan

MANILA, Philippines - Globe Telecom Inc. has tapped Philippine National Bank (PNB) for a P7 billion loan to bankroll its capital expenditures and general corporate requirements this year.

Globe chief finance officer Alberto de Larrazabal informed the Philippine Stock Exchange (PSE) that the company has signed a seven-year term loan with PNB.

For this year, Globe is spending $850 million for its capital expenditures including the $200 million carry over from last year’s budget.

Of the $650 million fresh allocation for this year, approximately 75 percent of the total amount would be allocated to data-related projects for Tattoo long term evolution (LTE) and Tattoo Home Broadband.

The remaining 25 percent would cover investments in new platforms and business support systems in line with product innovations, store deployment, and other corporate requirements.

Earlier, Larrazabal said Globe would raise between $300 million and $350 million via the debt or capital markets to finance the capital expenditures.

Larrazabal pointed out that the company is studying the possible sources of funds including bank loans or tapping the capital markets through the issuance of bonds or notes.

“Typically what we do is we go out to the market and try to figure out what is the most cost effective. There is a lot of appetite for direct lending and the capital markets continue to be very vibrant. Just look at the deposits at the central bank to understand how much liquidity there is in the market. There is no clear decision at this point in time on which instrument to use,” he added.

Amid intensified competition in the telecom industry, 2014 was another banner year for Globe as its core net income surged 250 percent to P14.49 billion from P11.62 billion in 2013 while its net income jumped 170 percent to an all-time high of P13.4 billion from P5 billion.   – Lawrence Agcaoili

On the other hand, revenues increased nine percent to P99.02 billion last year from P90.5 billion in 2013. This after mobile browsing and other data revenues grew 23 percent to P14.3 billion from P11.6 billion amid the continuous demand for data services, popularity of data-driven products and applications, and the continuing shift among consumers to a digital lifestyle.