MANILA, Philippines - Listed Globe Telecom Inc., a joint venture between conglomerate Ayala Corp. and Singapore Telecommunications Ltd. (Singtel), has obtained a $40-million loan from a Japanese bank to restructure the company’s debt profile.
Globe chief financial officer Alberto de Larrazabal said in a statement submitted to the Philippine Stock Exchange (PSE) that the telecom provider has signed a three-year loan term facility with Mizuho Bank Ltd.
De Larrazabal said the proceeds of the loan facility would be used to prepay and refinance the company’s debt.
“The loan will help us generate savings,†he said.
According to him, Globe has decided to prepay and refinance its debt due to the favorable environment in the debt market.
Globe has so far raised close to $200 million this year to finance the company’s capital expenditures. It tapped Metropolitan Bank and Trust Co. (Metrobank) of taipan George SK Ty for a $120 million loan facility last March 25 and another $75 million loan facility with the Bank of Tokyo – Mitsubishi UFJ last March 6.
Proceeds of the loan obtained last March would be used to finance the company’s capital expenditures including the ongoing network modernization and transformation program as well as investments in fixed line, international cable facilities, and information technology infrastructure.
Early this month, the Securities and Exchange Commission (SEC) has given Globe the green light to issue up to P7 billion worth of bonds to finance its capital expenditures and at the same time pare down its debt this year.
Globe intends to issue up to P7 billion worth of seven-year fixed rate bonds due 2020 and 10-year fixed rate bonds due 2023.
Globe has earmarked between $450 million and $500 million consisting of $160 million to $200 million for transformation initiatives and $290 million for investments in fixed lines, international cable facilities, and information technology (IT) infrastructure.
The company completed the first phase of its $700 million network modernization and transformation program last March and has started its $90 million IT upgrade.