Globe owners to infuse P6B for expansion

The major stockholders of Globe Telecom Inc. will pour in over P6 billion in fresh equity to help fund the company’s aggressive expansion binge over the next four years, a top official said.

In a disclosure to the Philippine Stock Exchange, Globe Telecom corporate secretary Renato Marzan said the company’s board has approved the additional issuance of 8.855 million common shares to accommodate the capital infusion of Ayala Corp., DeTeAsia Holding Gmbh (a wholly-owned subsidiary of Deutsche Telekom) and Singapore Telecom International Pte. Ltd.

"The issuance will come from the 16 million new common shares approved and authorized by the shareholders of Globe Telecom at the annual stockholders meeting last April which may be issued by Globe in one or more offerings other than rights issue or private placement to fund the capital requirements of the corporation," Marzan said.

The equity infusion will amount to P6.075 billion or P686 per share.

For its capital expenditure program, Globe expects to spend $2.3 billion up to 2005, the bulk of which will be channeled into its flagship wireless or cellular phone business.

As of end-September 2001, Globe’s subscriber base had exceeded the four million mark and is expected to expand further following its operational merger with Isla Communications early this year.

To support the growth in subscription, Globe continues to invest in its network expansion to improve network quality and customer service. This year alone, the company has earmarked P38.6 billion for its expansion of which P21 billion has been spent in the first nine months.

Ayala Corp., DeTeAsia and Singapore Telecom hold a combined 80 percent of the common shares of Globe with the rest in public hands. Some 158 million in preferred shares are owned by Asiacom Philippines following the share-swap with Islacom which made the letter a 100-percent Globe subsidiary.

Asiacom is a holding company owned 60 percent by Ayala Corp., 20 percent by Singapore Telecom and 20 percent by DeTeAsia.