Globe adds another US$340 million to towers stash

Globe Telecom has agreed to sell 1,350 towers to Phil-Tower Consortium for 20 billion pesos (almost US$340 million), its third towers deal in the past few months.

In all, the Philippines telco is set to bring in PHP91 billion ($1.5 billion) from the three tranches of the deal, giving it a fair sum of cash both to service debt and for spending on its networks.

This latest portion of the deal will see Phil-Tower pick up sites – 90% of which are ground-based towers, with some rooftop sites thrown in – mainly in the islands of Visayas and Mindanao, as well as inking the usual leaseback deal with Globe, in this case a 15-year arrangement. Globe said it estimates the pre-tax gain from the transaction to come in at PHP5.2 billion ($88 million).

Phil-Tower welcomed Macquarie Capital as an investor at the back end of last year.

It seems the deal will close in multiple stages, the first of which is due by the end of the year, subject the usual closing conditions, with other completions to follow later.

Globe took the same approach with the first two tranches of its towers sale, back in August. To recap, it offloaded 2,180 towers to Miescor Infrastructure Development Corporation (MIDC), backed by Stonepeak, for PHP26 billion, and simultaneously announced that Frontier Towers would pay PHP45 billion for a second tranche of 3,529 sites.

It hoped that the first closings for both would come in the third quarter of this year. Right on schedule, it has just closed the first portion of the Frontier Towers deal, parting with 800 of the towers for PHP10 billion in cash, but appears to be running slightly late on the MIDC deal; that will now complete “within the next few weeks,” the telco predicts.

All in, the telco has now brokered deals for all of the 7,059 towers it put up for sale earlier this year. As above, its total proceeds come in at PHP91 billion, which translates to pre-tax gains of PHP30.8 billion ($520 million). And that’s spending money for Globe.

“This record-setting deal shows Globe’s commitment to capital efficiency and financial sustainability,” said the operator’s chief financial officer Rosemarie Maniego-Eala. Globe notes that the overall deal represents the Philippines’ biggest ever tower sale-and-leaseback deal. “Through this initiative, we ensure our balance sheet health, which allows us to properly complete and fortify our market leading position,” the finance chief said.

Globe has been fairly vague on how it will spend its towers windfall, as you might expect. There has been much talk over the past couple of months about the telco expanding its digital ecosystem, and indeed the company styles itself as a digital platform these days, citing telecoms as one of its major interests, alongside fintech, digital marketing, venture capital funding and so forth.

But the fact remains that Globe is a major telco in its market and it will have to invest heavily in that business in the coming years, in 5G and fibre infrastructure, among other things. As many of its peers have done in other markets, Globe is capitalising on the value and attractiveness of its towers portfolio to give it a leg up elsewhere.

Get the latest news straight to your inbox. Register for the Telecoms.com newsletter here.