Globe borrows P20 billion from BDO

MANILA, Philippines — Globe Telecom Inc. has secured another loan facility, this time from BDO Unibank Inc., for P20 billion to bankroll expansion projects and pay down its debt.

The Ayala-led telco said in a disclosure before the Philippine Stock Exchange that it signed another term loan facility worth P20 billion with the largest bank in the Philippines owned by the family of the late retail and banking magnate Henry Sy.

The proceeds of the loan facility would be used to fund capital expenditures and settle expiring loans.

This also marks the third time in four months that Globe turned to local banks to get fresh debts.

In September, Globe borrowed P15 billion from Metropolitan Bank & Trust Co. (Metrobank) to prepare its war chest for new and expansion efforts.

Globe followed this up with a P12-billion borrowing from some of the country’s biggest banks.

Last month, it borrowed P5 billion from China Banking Corp., P4 billion from Gokongwei-owned Robinsons Bank Corp. and P3 billion from Ayala-led Bank of the Philippine Islands (BPI).

Based on its financial report, Globe’s gross debt inched up by five percent to P245.48 billion as of September, exceeding the P233.21 billion recorded at the end of 2022.

Globe’s net debt to earnings before interest, interest, depreciation and amortization rose to 2.46 percent, while debt to equity coverage increased to 1.44 percent.

Globe committed that its balance sheet and cash flows stand strong with enough liquidity to support its growth.

Globe is borrowing from local banks even as it trimmed its capital expenditures to $1.3 billion in 2023 from an all-time high of $1.9 billion in 2022.

Globe suffered a 27 percent drop in its profit in the nine months to September on the continuous increase in costs, particularly general and depreciation expenses.

The company’s net income fell to P19.29 billion during the period from P26.46 billion a year ago.

Although revenue improved by three percent to P133.79 billion, this was offset by a four percent increase in expenses to P116.86 billion.

Nevertheless, Globe president and CEO Ernest Cu believes the company would weather economic risks that lie ahead, confident that the telco’s diversified portfolio would carry it through.