26.6 C
Thursday, February 22, 2024

Globe selling P90B worth of towers

- Advertisement -

Globe Telecom Inc. said Friday it expects to raise nearly P90 billion from the sale of over 7,000 towers, the largest sale and leaseback transaction in the Philippines.

The telecom unit of Ayala Group said it signed two sale and leaseback agreements for two portfolios consisting of 5,709 telecom towers and related passive telecom infrastructure for over P71 billion.

The company is also in advanced discussion with another tower company over the potential sale and leaseback of an additional 1,350 towers.

“We have always been looking for ways to monetize our tower assets and this record-breaking initiative marks our continued commitment to optimize our capital raising efforts and further strengthen the balance sheet as we seek to capitalize on opportunities in the telecommunications sector and complementary services,” said Globe chief finance officer Rizza Maniego-Eala.

Globe president and chief executive Ernest Cu said the expanded long-term partnerships with the tower companies show the company’s commitment to help improve the Philippines’s internet condition.

- Advertisement -

“We also believe that through these monetization efforts, Globe will be able to further improve overall operational efficiency, allowing us to serve our customers better, and supporting our goal of enabling the digital lives of Filipinos,” he said.

Globe said the pricing and terms for the third portfolio would likely be similar to the first two, which were P12 million and P12.7 million per tower, respectively. This means the 1,350 towers under the third portfolio will cost between P16.2 billion and P17.14 billion.

The tower assets are made up of 79 percent ground-based towers and 21 percent rooftop towers. They were grouped into three unique distinct portfolios assigned to three different tower companies representing local and international groups.

Globe reported a 51-percent increase in net income in the first half to P19.7 billion, boosted by mobile and corporate data businesses.

“We are happy that the Globe Group’s performance accelerated solidly in the first half of the year, rebounding our topline to pre-COVID levels. We are consistently delivering value to our customers and uplifting their lives through connectivity or other digital solutions,” said Cu.

Globe’s consolidated service revenues in the first six months hit a record P78.9 billion, up 4 percent year-on-year.

Globe signed a deal to sell the first portfolio of 2,180 telecom towers to MIESCOR Infrastructure Development Corp. for P26 billion. The towers will be leased back to Globe for an initial period of 15 years.

The second portfolio, consisting of 3,529 towers, will be sold to Frontier Tower Associates Philippines Inc. for P45 billion and will also be leased back over an initial period of 15 years. The first closing target for this portfolio is targeted to happen in the late third quarter.

Globe expects to sign the sale and leaseback agreement for the third portfolio, which consists of 1,350 towers, in the third quarter, with first closing happening in the fourth quarter.

After the transaction, Globe will have 4,000 to 5,000 remaining towers.

Globe said the proceeds of the tower sale would be used to fund capital expenditures and cover its 2023 debt servicing requirements.

- Advertisement -


Popular Articles