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Globe raises P1.9B from 160 towers

GLOBE Telecom, Inc. has closed a deal for an additional 160 towers to be acquired by MIESCOR Infrastructure Development Corp. (MIDC) for approximately P1.9 billion, the company announced on Tuesday.

“Globe and MIDC are one in getting this partnership up to speed with the latest batch’s closing, and we undertake to turn over more in the coming months,” Chief Finance Officer Rosemarie Maniego-Eala said in a press release.

“I am delighted that our tower initiatives continue to provide enormous support in our corporate financing and in the acceleration of our network expansion, which are essential as we digitally enable Filipinos one innovation at a time,” she said.

The transaction brought Globe’s closed tower deals to 1,020 out of 2,180 telecommunication towers and related infrastructure to be acquired by MIDC.

The sale dates back to Aug. 11, 2022 when Globe signed agreements with MIDC and Frontier Tower Associates Philippines, Inc. for the sale of 5,709 telecommunication towers for P71 billion.

On Oct. 14, Globe and MIDC closed 701 towers for P8.4 billion, which was followed on Dec. 16, 2022 wherein they closed 159 towers for P1.9 billion.

“There will be multiple closing dates which will happen as and when closing conditions are met. We will continue to provide updates on the relevant development of the disposal of tower assets in due course,” Globe said.

Globe has already completed 44% of the sale or a total of 3,280 towers out of 7,506 have been transferred to the tower companies.

“We are dedicated to supporting network operators in meeting the evolving needs of business and consumers in this rapidly evolving digital age. Our shared goal is to transform the Philippine digital landscape and enable greater access to digital services for all Filipinos,” MIDC President and Chief Executive Officer (CEO) Helen Grace T. Marquez said.

“We are certain that our partnership with MIDC reinforces this objective and are excited to see what we can accomplish together,” said Ernest L. Cu, president and CEO of Globe.

Meanwhile, credit analyst CreditSights said that Globe’s tower sales proceeds will provide a greater financial buffer for capital expenditure.

“We expect Globe to receive approximately P52.4 billion of tower sales proceeds through 2023, which would provide a greater financial buffer for capex and potential mild deleveraging,” it said.

The company has signed a total of P96.6 billion tower sales to date, which CreditSights said comprise the three previously announced tranches totaling P91.2 billion and the newly announced P5.4-billion deal which first close is expected by the third quarter this year.

For the next three quarters, CreditSights is expecting the company to deliver better credit metrics on the back of earnings growth and the inflow of tower sale proceeds.

“We expect full-year 2023 revenues and earnings before interest, taxes, depreciation, and amortization to grow in the low-to-mid single digits percentage year-on-year, as gradual average revenue per user recovery and resilient subscriber demand mitigate hot domestic inflation and strong competition,” it said.

CreditSights said that Globe continues to lead in the mobile market space, but noted that it has a weaker presence in the broadband space compared with PLDT Inc. — at 30% market subscriber market share versus 40%.

“We also remain wary of new mobile entrant DITO Telecommunity Corp.’s rapid expansion pace, where its strong backing from major shareholder China Telecom and plans for a follow-on equity offering in 2023 by the parent company DITO CME Holdings Corp. could ease its tight liquidity and pose a stiffer challenge to incumbents Globe and PLDT,” it said. — Justine Irish DP. Tabile

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