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Globe sells telecom towers for P71B

(Ventures Cebu Photo)

Globe Telecom, Inc. said it has signed sale and leaseback agreements worth P71 billion for the sale of nearly 6,000 telecommunications towers in Luzon to raise funds for its ongoing network expansion and partly settle its debts.

Globe, a leading telecommunications company with a market value of more than P293 billion, is also in advanced talks with another company for the sale of an additional 1,350 towers in the Visayas and Mindanao.

With the additional capital that will be raised from these transactions, 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," Globe president and chief executive officer Ernest Cu said.

In a disclosure to the Philippine Stock Exchange Friday, Aug. 12, 2022, Globe said its board of directors approved the sale of over 7,000 towers. These will be leased back to Globe for an initial period of 15 years.

Sale and leaseback agreements have been signed with two companies, with the transaction expected to be executed beginning the third quarter of 2022:

  • MIESCOR Infrastructure Development Corp. will acquire 2,180 telecom towers in Luzon for around P26 billion.

  • Frontier Tower Associates Philippines, Inc. will acquire 3,529 towers for around P45 billion.

For the third portfolio, Globe said it hoped to sign the sale and leaseback agreements in the third quarter and begin closing the transaction in the fourth quarter of 2022.

We 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. - Ernest Cu, Globe president and CEO

The sale of Globe's tower assets happened around four months after PLDT sold 5,907 telecommunication towers, or around half of its tower assets, for P77 billion to Malaysian companies EdgePoint and edotco Group. PLDT subsidiary Smart Communications, Inc. will lease back the towers for a period of 10 years.

Of the over 7,000 towers that Globe is selling, 66% are located in Luzon, 19% in Mindanao, and 15% in Visayas. Nearly 8 of 10 towers (79%) are ground-based while the rest (21%) are rooftop towers.

Upon completion of this transaction, Globe said this will be the "largest ever tower sale and leaseback deal in the country."

Three-fourths (75%) of the proceeds will be used to fund capital expenditures, to support ongoing network expansion and sustain industry-leading network consistency and reliability scores, while 25% will be earmarked to cover the company's 2023 debt servicing requirements.

Globe reported a 13% increase in its mobile subscriber base to 87 million as of Dec. 31, 2022, according to data analytics firm Statista. (MVI/Ventures Cebu)

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