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GLOBE
Telecom has obtained regulatory approval to go ahead
with the construction of the proposed $40-million
international cable landing station in Ballesteros,
Cagayan.
The
cellular firm received from the National
Telecommunications Commission (NTC) last week an
18-month provisional authority (PA) to establish,
install, operate and maintain the facility, the
company’s second after the Batangas international cable
landing and submarine cable system.
The
commission, in its 10-page order, said Globe is
financially sound to finance the project. “The cost of
the project is $40 million or equivalent to more or less
P1.8 billion while the equity requirement amounts to
P540 million,” noted the NTC. The new facility is
expected to be completed in November this year.
Globe is
building a second cable landing station to address the
increasing demand for international bandwidth. Globe’s
first cable system, it said, is vulnerable to
earthquakes and other natural calamities.
The
cellular firm is the exclusive landing party in the
Philippines to the new cable project spearheaded by VSNL
International, a member of the Tata Group of India,
which will build the first private submarine cable
system in the Asia-Pacific region.
The
17,000-kilometer cable network will link the Philippines
to Hong Kong, China, Japan, South Korea, Singapore and
Taiwan with possible extensions to other countries in
Southeast Asia January of this year.
Meanwhile, Globe said Thursday it has decided not to
renew its credit rating review agreement with Moody’s
Investors Service.
Globe’s
head of investor relations Cherry Chan-Tan said over the
phone that the contract with Moody’s has expired last
June.
“Should
the need arise, we will definitely talk to them again.
We have had communications with Moody’s about the
nonrenewal of the contract since early this year.
Besides, we have already fully redeemed most of our
dollar-denominated debt which was among the reasons why
we contracted Moody’s,” said Tan.
In a
disclosure to the stock exchange, Globe said it will
maintain credit rating agreements with at least one
international ratings agency and one local ratings
agency.
“We are
still maintaining our agreements with Standard & Poor’s
and with PhilRatings. Our contract with S&P will expire
in October,” she added.
Prior to
the withdrawal of the rating, Moody’s had assigned a
Baa1 local currency issuer rating on Globe.
“Following the early redemption of its $300-million
senior notes in April 2007, Globe has decided not to
renew its credit rating review agreement with Moody’s
Investors Service,” said Globe in a statement.
Globe’s
chief financial officer Delfin Gonzalez had said the
bond redemption was expected to have generated an
estimated P2.32 billion in savings in interest expenses
and cut Globe’s total foreign and local debt to about
$650 million by end 2007 from about $800 million at the
end of 2006. |
