Philippines’ Globe Telecom to sell over 7,000 towers; expects 71b pesos in proceeds from sale so far
Michelle Zhu
GLOBE Telecom has obtained board approval to sell over 7,000 towers in what will be the largest tower sale and leaseback deal in the country.
In a press statement on Friday (Aug 12), the Philippine telco associate of Singtel projected total net proceeds of 71 billion pesos (S$1.75 billion) from 2 portfolios it has already agreed to sell.
It intends to use the bulk (75 per cent) of proceeds to fund capital expenditures to support ongoing network expansion, as well as sustain network consistency and reliability scores.
A remaining 25 per cent will be earmarked to cover Globe’s debt servicing requirements, which the company believes will significantly improve the health of its balance sheet and provide “sufficient flexibility to properly compete in this dynamic market as well as further expand its digital ecosystem”.
The more-than 7,000 towers to be sold are 79 per cent ground-based and 21 per cent rooftop-based. They have been grouped into 3 portfolios assigned to separate tower companies.
The first portfolio comprises 2,180 telecom towers in Luzon, which will be acquired by Miescor Infrastructure Development Corporation for a consideration of 26 billion pesos and leased back to Globe for an initial period of 15 years. The first close for this portfolio is targeted to happen within Q3 of 2022.
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Another portfolio consisting of 3,529 towers will be sold to Frontier Tower Associates Philippines for 45 billion pesos. It will also be leased back to Globe over an initial period of 15 years and the deal is targeted to achieve its first closing in late Q3 of 2022.
For these portfolios, 2 sale and leaseback agreements have already been signed by Globe for the total 5,709 telecom towers and related passive telecom infrastructure for over 71 billion pesos.
Pre-tax transaction gain for the first portfolio is estimated to be 10.6 billion pesos, and 15 billion pesos for the second portfolio.
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Globe said it is in advanced discussions with another tower company for the potential sale of the third portfolio of some 1,350 telecom towers located in Visayas and Mindanao, and related passive telecom infrastructure. The group expects to sign a leaseback and sale agreement with the tower company, which has yet to be named, within the third quarter and targets for its first close to occur within Q4 of 2022.
News of the telecom tower sale first emerged earlier in June this year when Globe was reported to have entered into exclusive talks with bidders for its telecommunication tower portfolio.
Citing identified sources, Bloomberg reported the transaction could be worth as much as US$1.5 billion and that the company was considering selling about 6,000 towers in a 2-part deal.
Shares of Singtel were $0.01 or 0.4 per cent higher at S$2.63 as at the midday trading break, before the latest announcement was made by Globe.
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