Globe secures P1-billion loan from Landbank for capital expenditures

MANILA, Philippines - Globe Telecom has secured a P1-billion term loan facility from the Land Bank of the Philippines (Landbank) for financing its expansion program this year.

In a disclosure to the Philippine Stock Exchange, Globe said the loan will be used to fund capital expenditures. Last month, the company said it was allotting $350 million to $400 million for its continued expansion program this year.

Globe said around $150 million of the total budget for expansion will be spent for consumer broadband including the third generation of mobile communications technology (3G), $130 million for core cellular 2G (second generation mobile technology), $25 million for corporate data, $20 million for support capex, and $25 million as carry-over spend for international cable facilities and other non-recurring capex.

Aside from $66 million in borrowings earlier drawn, Globe is also looking at sourcing another P5 billion in the near term from the proceeds of a company retail bond offer.

Globe was recently authorized to offer up to P10 billion in retail bonds to finance both capex and maturing debts this year of around $250 million.

Globe president and chief executive officer Gerardo Ablaza said he expects a better year for the company in 2009, with modest growth in both revenues and bottom line.

In the broadband sector, Ablaza said they project the growth momentum to continue into this year, offsetting declines in the traditional landline service. For wireline and corporate data, he said there will still be growth opportunities as corporate demand remains resilient, particularly for mission-critical services including those of the business process outsourcing (BPO) sector.

Ablaza said the company will deploy leapfrog technologies such as Wi-Max and 3G, improve network quality and coverage, and introduce affordable products and bundles that will drive adoption in broader markets.