Globe’s P2.7-B bond offering gets SEC okay

The Securities and Exchange Commission has approved the P2.7-billion bond offering of Globe Telecom Inc., the cellular unit of Ayala Corp.

The bonds which carry a maturity of three years to five years, will be issued at 100 percent of face value.

Net proceeds from the offering, amounting to P2.67 billion, will be used by Globe to pay off debts maturing in 2004. The company has P58.6 billion worth of long-term debts maturing from 2003 to 2012. Its short-term debt, on the other hand, amounts to P7.4 billion.

A large portion of this debt service will come from the company’s 2009 bond, which has a call option in Aug. 2004.

In another development, Fortune Cement Corp. has approved the issuance of 708.3 million new shares to settle a loan from its parent firm Republic Cement Corp., the company told the Philippine Stock Exchange.

Fortune Cement issued convertible notes to Republic Cement in Feb. 1999 in exchange for a loan amounting to P2.125 billion. Each share is valued at P3.

Last month, the company’s board approved the issuance of 193.9 million new shares at P4.08 each to settle another loan from Republic Cement.

Both Fortune Cement and Republic Cement are local cement manufacturers.

Fortune’s board also approved a merger of the company and its subsidiary, Premier Cement Corp. The merger is seen to simplify the legal structure and promote significant cost efficiency improvements, such as use of substantial spare equipment and machinery by the company, single statutory audit and reportorial requirements.