To settle its debt and finance expansion initiatives, Globe Telecom Inc. has recently obtained a P20 billion borrowing facility from BDO Unibank Inc.
In a report filed before the Philippine Stock Exchange (PSE), the Ayala-led telco announced that it had inked a P20 billion term credit facility with the country’s biggest bank, which is owned by the late retail and banking tycoon Henry Sy’s family.
People lining up at Globe Telecom’s business center
According to the report filed with the PSE, capital expenditures and loan repayments that are about to expire will be covered by the credit facility’s profits.
This is the third time in the last four months that Globe has obtained new loans by going to nearby banks.
Globe obtained a P15 billion loan from Metropolitan Bank & Trust Co. (Metrobank) in September this year to fund its expansion and new initiatives.
The telecom company has since borrowed P12 billion from some of the largest banks in the nation. Last month, Globe borrowed P5 billion from China Banking Corporation, P4 billion from Gokongwei-owned Robinsons Bank Corporation, and P3 billion from the Ayala-led Bank of the Philippine Islands (BPI).
Globe optimistic it could weather impending economic challenges
According to its financial report, Globe’s gross debt increased by 5% to P245.48 billion as of September, surpassing the P233.21 billion reported at the end of 2022.
While debt-to-equity coverage improved to 1.44 per cent, Globe’s net debt to profits before interest, interest, depreciation, and amortization jumped to 2.46 per cent.
Globe pledged to have a solid balance sheet and cash flows with adequate liquidity to support its expansion.
Globe reduced its capital expenditures from an all-time high of $1.9 billion in 2022 to $1.3 billion in 2023, but it is still borrowing from neighborhood banks.
Globe’s earnings for the nine months ended in September decreased by 27% due to ongoing cost increases, especially in general and depreciation charges.
During that time, the company’s net income decreased from P26.46 billion to P19.29 billion from the previous year.
Despite a three per cent increase in revenue to P133.79 billion, expenses increased by four per cent to P116.86 billion.
Nevertheless, Ernest Cu, president and CEO of Globe, has remained optimistic that the business would weather impending economic challenges because of its diverse portfolio.
