Globe OKs P32 billion stock rights offer

MANILA, Philippines — Globe Telecom Inc. plans to raise up to P32 billion from a stock rights offer to fund its network expansion and repay debt.

In a disclosure to the stock exchange yesterday, Globe said its board of directors approved a stock rights offer for the company’s eligible common shareholders.

The Ayala-led telco said the common shares for the rights offer would be issued out of the increase in the company’s authorized capital stock, which was approved by its board and shareholders last April.

The increase in capital stock, the stock rights offer, and the listing of the shares on the Philippine Stock Exchange are each subject to the relevant regulatory approvals.

Globe expects to launch the stock rights offer after receiving the required approvals “under favorable market conditions.”

The company’s principal shareholders Singapore Telecom International Pte. Ltd. – a wholly owned subsidiary of Singtel – and Ayala Corp. have both indicated their support for the stock rights offer.

“This marks the first time Globe will do a rights offer in the capital market in over two decades and shows the principal shareholders’ confidence in the company and its plans going forward,” Globe chief finance officer Rizza Maniego-Eala said.

“We believe there is excitement in the market for Globe’s future prospects and potential amid the massive demand for data-related services as more Filipinos are now embracing the benefits of digitalization,” she said.

Mandated as sole global coordinator, domestic lead underwriter and joint bookrunner for the offer was BPI Capital Corp.

UBS AG Singapore branch was selected as sole international underwriter and joint bookrunner, with PNB Capital and Investment Corp. as domestic co-lead underwriter.

Proceeds from the rights offer will be used by company for the expansion of the mobile and broadband network as well as debt repayment for loans used to fund capital expenditures.

Globe said the proposed stock rights offer would also enable the company to further expand its digital ecosystem and further differentiate itself in the market, as it capitalizes on opportunities in and beyond telco.

“This capital raise will also provide Globe added flexibility to properly compete as we aim to continue delivering quality services to our millions of customers and keep our leadership position in the country,” Maniego-Eala said.

“This effort will also further strengthen our balance sheet and empower us to further develop adjacent businesses that will enable the Filipino digital lifestyle,” she said.

Globe has invested close to P250 billion in capital over the last four years to boost its network.

It has committed to spend another P89 billion this year to support the fast growing demand for mobile and broadband services in the country.

In the first quarter, Globe saw data traffic in its network rise significantly by 27 percent year-on-year, with growth buoyed by the increased smartphone penetration in the network.

Despite this increase, Globe said Filipino data usage still lags behind neighboring countries and there is still latent demand in the market today.