CLARK FREEPORT Globe telecom has obtained board approval for its milestone initiative to sell over 7,000 towers, of which 66 percent are located in Luzon, 19 percent in Mindanao, and 15 percent in Visayas.
The tower assets up for sale are made up of 79 percent ground-based towers and 21 percent rooftop towers and have been grouped into three unique distinct portfolios assigned to three different tower companies representing local and international groups with deep expertise in telecom tower infrastructure, engineering and construction.
Upon completion, this transaction will represent the largest ever tower sale and leaseback deal in the country.
Globe expects to raise a significant amount of capital over the next few quarters from executing this transaction.
Of the total proceeds, 75 percent will be used to fund capital expenditures, support ongoing network expansion, and sustain industry-leading network consistency and reliability scores.
The balance of 25 percent will be earmarked to cover its 2023 debt servicing requirements.
Globe signed two sale and leaseback agreements for two portfolios consisting of 5,709 towers and related passive infrastructure for over P71 billion.
The first portfolio being sold consists of 2,180 telecom towers in Luzon, which will be acquired by MIESCOR Infrastructure Development Corporation (MIDC) for a total consideration of P26 billion, and leased back to Globe for an initial period of 15 years.
This longer lease tenor provides Globe with more stability and certainty with regard to the use of these passive infrastructures, which is critical to its core telco service.
The first close for this portfolio is targeted to happen within the third quarter of the year, with subsequent closings happening as and when closing conditions are met.
Globe estimates the pre-tax transaction gain from this first portfolio to be P10.6 billion, reporting and recognition of which will be according to the timing of the transaction closings.
The second portfolio consisting of 3,529 towers will be sold to Frontier Tower Associates Philippines Inc., for P45 billion, and also leased back for a minimum of 15 years.
The first closing target for this portfolio is targeted to happen in the late third quarter, with subsequent closings happening as and when closing conditions are met.
Globe estimates the pre-tax transaction gain for this portfolio at P15 billion, reporting and recognition of which will be according to the timing of the transaction closings, which will be on a staggered basis.
Globe is also in discussion with a company for the potential sale and leaseback of an additional 1,350 telecom towers and related passive telecom infrastructure.