Globe signed a new P5.4-B tower deal
Globe Telecom [GLO 0.18; 99% avgVol] [link] said that it signed a P5.4 billion sale/leaseback deal for 447 of its cell towers to a company called Unity Digital Infrastructure, which is a partnership between Aboitiz Infracap, a subsidiary of Aboitiz Equity Ventures [AEV 54.00 3.6%; 111% avgVol], and the Partners Group, which is a global private equity firm.
GLO said that it expects to close the deal in tranches, with the first tranche closing sometime in Q3 of this year.
No timeline was given for subsequent closings. The term of the leaseback is 15 years. This sale increases the total of towers that GLO has sold to 7,506, with proceeds from the overall tower sale initiative going toward “capital expenditures and maturing debts”.
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Readers will know I’m a big fan of these sale/leaseback deals.
They raise a huge chunk of money that the selling company can put to use right away, and these transactions help narrow the company’s focus to doing what it does best.
It’s conceivable that GLO could probably have raised a massive chunk of money-spinning the towers off in its own REIT, but perhaps GLO felt like it was easier to just sign away ownership of the towers and be done with it without having to worry about minimum public ownership levels every time a new batch of towers was ready to be infused.
All that said, GLO’s constant “we’re a techco not a telco” messaging is starting to feel really forced.
This deal helps shed some of of its telco assets, but the company’s 2023 capex budget is still connectivity-heavy, and quite modest compared to the blockbuster capex spending during GLO’s recent network rollout.
GLO still feels very much like a telco, despite these creative equity-raising activities.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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