MANILA, Philippines - Globe Telecom Inc. said yesterday it has secured a 15-year term loan worth P5 billion from the Union Bank of the Philippines to finance the partial acquisition of San Miguel Corp.’s telecommunications assets.
In a disclosure to the Philippine Stocks Exchange (PSE), Globe said the loan would be used to finance the acquisition of a 50 percent equity interest in Vega Telecom Inc. (VTI), Bow Arken Holdings Co. Inc. (BAHC) and Brightshare Holdings Corp. (BHC).
“Globe stands by its commitment to improve internet speeds for its mobile and home broadband customers, given the added resources and capabilities from the acquisition,” the company said in a statement.
Globe and its rival, Philippine Long Distance Telephone Co. (PLDT) announced their decision to acquire the telco assets of SMC last May.
This includes shares in the three companies, namely VTI, BAHC and BHC, which have an estimated total enterprise valuation of P70 billion. Equity value amounted to P52.8 billion, translating P26.4 billion for Globe’s 50 percent equity stakes.
VTI owns an equity stake in Liberty Telecom Holdings Inc. and various companies, including Bell Telecommunication Philippines Inc., Eastern Telecom Philippines Inc., Express Telecom Inc., and Tori Spectrum Telecom Inc., among others.
The first half of the payment was settled upon signing of the agreement. Two more payments, each for 25 percent, are expected six and 12 months after the closure of the deal.
The transaction is expected to benefit mobile internet customers, given the added capacities and greater geographic coverage that additional spectrum, particularly that of the 700MHz, can provide.