MANILA, Philippines - Globe Telecom, the telecommunications arm of conglomerate Ayala Corp., has obtained a seven-year, P7-billion term loan facility from BDO Unibank Inc. to fund its 2011 capital expenditures and prepay debt.
The BDO loan is the first loan facility signed by Globe Telecom this year.
“We intend to use the BDO facility to fund our capital expenditure requirements this year and prepay up to P3 billion in loans that originally mature in 2012. The current low interest rate environment allows us to replace these loans with cheaper debt, generating savings for the company”, said Albert De Larrazabal, chief financial officer of Globe Telecom.
As of end-September 2010, Globe’s debt-to-equity ratio was at 1.16.
Globe reported a 24 percent drop in net income in the nine months that ended September 2010 to P7.4 billion as consolidated service revenues fell two percent to P45.8 billion due to soft mobile revenues owing to the proliferation of unlimited promos.
Subsidy and operating expenses were also higher as the company continues to channel investments in upgrading its mobile and broadband networks, acquiring new customers, and competing for market share.
As of end-September last year, Globe had over 980,000 postpaid subscribers, an increase of 16 percent compared to last year, while prepaid mobile subscribers stood at 25.4 million, up 10 percent.
Broadband subscribers also breached the one million-user mark at the end of the third quarter of 2010, or nearly double compared with the previous level.