Globe eyes $120-M loan for 2013 capex

To fund its capital expenditures this year, Globe Telecom Inc. is in talks with financial institutions for $120 million in finance, the company said Tuesday. This last tranche of the telco's financing program for the year would be completed within the first half of the year, chief financial officer Alberto de Larrazabal told reporters after the Globe's annual stockholders’ meeting at Fairmont Hotel in Makati City. The joint venture of Ayala Corp. and Singapore Telecom International Pte Ltd. has raised $195 million early this year from two loan facilities from foreign and domestic banks. “We have raised about $200 million so far and we need about $120 million equivalent more to go, De Larrazabal said. “We are currently in discussions with financial institutions as the financial markets continue to offer many different alternative and very attractive opportunities for financing,” he added. The company is yet undecided on whether to draw from the foreign or domestic debt market. “From a time and perspective, this is something that we will more likely close towards the end of the first half of the year. As to whether we will be raising dollar financing or peso financing is still a bit early,” de Larrazabal noted. Last month, Globe went to taipan George SK Ty's Metropolitan Bank and Trust Co. for a $120 million loan and The Bank of Tokyo-Mitsubishi UFJ. The company’s 2013 capital expenditures is estimated at $450 million to $500 million.   In a press conference, president and chief executive officer Ernest Cu noted the company is practically done with the first phase of its $700 million network modernization and transformation program and now completing the transformation of 100 more cell sites to complete its two-year network modernization and transformation program. “From this point on, 2013 is the year when our transformation will start to bear fruit,” he said. However, De Larrazabal believes that net profit would remain on a downtrend this year as the  modernization and transformation program quickens depreciation.   The cost of fully depreciated property and equipment would continue to increase from P87.16 billion last year, P70.23 billion in 2011, and P52.47 billion in 2010, and have an impact on the bottom line. “Profit will continue to drop this year but core income will be a different issue this year,” De Larrazabal said. Net income dropped 30 percent to P6.857 billion last year from P9.832 billion a year, while earnings plunged 97 percent to P49 million in the fourth quarter of 2012 from about P1.8 billion in the same quarter in 2011. Revenues went up 6 percent to an all-time high P82.742 billion from P77.76 billion. — VS, GMA News