Globe gets P1.5 billion from tower sale

MANILA, Philippines — Wireless giant Globe Telecom has received P1.5 billion from its tower sale with PhilTower Consortium Inc., pumping in additional cash to pay for capital expenditures and maturing debts.

In a disclosure before the Philippine Stock Exchange, Globe said it has turned over another batch of 100 towers to PhilTower, allowing it to cash in P1.5 billion from the latest disposal.

Globe has turned over 67 percent, or 910, of the 1,350 assets covered by the sale and leaseback agreement signed with PhilTower in 2023.

From this, the company has raised P13.6 billion and expects to receive P6 billion more within the first half of the year. As with the rest of its tower sale, Globe plans to use the proceeds to fund its service upgrades and loan payments for 2024.

Gains from the tower sale also improve Globe’s financial condition, as it works on returning to a positive cash flow. In line with this, the telco is winding down its capex spending to a five-year low of P55 billion in 2024, from P70.6 billion in 2023.

“This transaction will allow Globe to efficiently raise capital, redeploy capital from our passive infrastructure to active equipment, improve balance sheet health and leverage expertise of tower companies,” Globe said.

As of 2023, Globe has liquidated 60 percent, or P57.4 billion, of the P96.4 billion that it expects to gain from the tower sale it entered into with independent operators.

In a recent financial briefing, Globe chief finance officer Rosemarie Maniego-Eala said the telco intends to collect the remaining P39 billion within the first semester.

Eala said it is urgent for Globe to transfer the towers as soon as possible, as capex will be funded partly by the proceeds. She noted that the telco will also acquire fresh debts to finance the rest of its budget for 2024.

On top of the PhilTower transaction, Globe signed similar deals with Frontier Tower Associates Philippines Inc. and Manila Electric Co.’s unit MIESCOR Infrastructure Development Corp. for the sale of 5,709 towers. For these agreements, the company will receive a combined P71 billion.

Globe also sold another tranche of 447 towers to Aboitiz-backed Unity Digital Infrastructure for P5.4 billion.

Across the wireless industry, telcos are disposing of their passive assets to third-party operators to cut business expenses and enhance cost efficiency.