Globe Telecom, a leading digital platform in the Philippines, announced on September 27 a sale and leaseback deal for another portfolio of telecommunication towers totalling 1,350 towers in a transaction valued at 20 billion pesos (US$339 million).
The latest tower asset sale to Phil-Tower Consortium (PhilTower), signed on September 23, consists of 90% ground-based towers and 10% rooftop towers. The towers, which are mostly located in Visayas and Mindanao, will be leased back to Globe for an initial period of 15 years.
The first close for this third portfolio of towers is targeted to occur by the end of 2022, with subsequent closings happening as and when closing conditions are met. Globe estimates the pre-tax transaction gain from this transaction to be 5.2 billion pesos, reporting and recognition of which will be according to the timing of the transaction closings.
The PhilTower deal brings the total number of towers Globe has sold to 7,059, up from 5,709 towers previously, and the expected total proceeds to 91 billion pesos, which will be used to finance capital expenditures and maturing debts.
Upon its completion, the overall transaction will represent the Philippines’ largest-ever tower sale and leaseback deal, the company says in a disclosure to the Philippine Stock Exchange. It will also significantly improve the overall health of Globe’s balance sheet, thus providing sufficient flexibility for the company to properly compete in the dynamic market and further expand its digital ecosystem.
Globe CFO Rosemarie Maniego-Eala says the deal underscores Globe’s commitment to capital efficiency and financial sustainability. “Through this initiative, we ensure our balance sheet health, which allows us to properly compete and fortify our market leading position,” she points out.
Globe president and CEO Ernest Cu adds: “We believe that our partnership with PhilTower, which has a proven track record and expertise in telecom tower infrastructure, shows Globe’s commitment to ensuring the improvement in the Philippines’ internet condition and the success of the country's digital transformation. Also, these monetization efforts will provide an uplift to Globe’s overall value, supporting our goal of enabling the digital lives of Filipinos.”
PhilTower president Devid Gubiani notes that the expansion into Visayas and Mindanao will give the company a truly nationwide reach and contribute to the advancement and growth of digital infrastructure in the Philippines.
UBS acted as the exclusive financial adviser to Globe on the transaction.
PhilTower is an independent tower company in the Philippines, which constructs and operates digital infrastructure in partnership with mobile network operators. It is backed by Macquarie Capital, the advisory, capital markets and principal investment arm of Macquarie Group.