GLOBE Telecom Inc. on Monday said it will be able to raise by middle of this year P10 billion of the P15-billion retail bond program announced by the cellular firm last Friday.
“We plan to issue P10 billion worth of retail bonds by June or July this year and the remaining P5 billion by 2013. We will apply for a license for the P15 billion retail bonds this May and we hope to get approval by then. The license is good for one year so that’s just enough time for the remaining P5 billion,” Globe Chief Financial Officer Alberto de Larrazabal told reporters in a briefing yesterday.
Proceeds will be used to fund capital expenditures and to partly prepay debts worth P3 billion.
Details of the bond offering are still being determined. However, the Globe executive said the tenors are “five, seven and 10 years or even push for a longer term.” The bonds will be offered to both institutional and retail investors.
The cellular firm is earmarking $790 million in network upgrade over the next five years, with $530 million to be spent in 2012 and $110 million in 2013.
For 2012, the cellular firm’s capex is estimated to reach $750 million to $800 million. This amount consists of the $530 million allotted for network transformation and $220 million for fixed line data investments, DSL capacity upgrades in selected regions, and submarine cable investments.
Larrazabal said the cellular firm had raised P5 billion with BDO Unibank, P5 billion with Rizal Commercial Banking Corp., and $90 million with China Bank. “That’s about P15 billion in all and we will have the P10 billion from the retail bonds this year,” said the Globe official, who added that the cellular firm sees no further borrowings for the year.
Globe ended 2011 with 30.04 million subscribers, up 13 percent from the previous year.
The cellular firm sees service revenues going up by low to mid-single digits this year from 2011 level P67.88 billion. Globe President Ernest Cu said this year’s revenue growth expectation is “in line with market trends.”
The cellular firm recorded an all-time high service revenues last year, nine percent higher than previous year’s P62 billion, aided by strong results from its mobile and broadband businesses.
This helped boost the company’s full year profit to P10 billion in 2011, up by 11 percent from the year previous. However, reported net income was flat at P9.8 billion at end-December last year from P9.7 billion in 2010 because of a one-time adjustment of P526 million in the fourth quarter of 2010.
