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Globe will offer 7K towers for sale with leaseback contracts.

In order to raise money and maintain access to these essential infrastructures, local telecommunications provider Globe Telecom, Inc. (Globe) intends to sell and lease back more than 7,000 of its towers around the nation to various tower firms.

According to information provided by Globe on Friday to the Philippine Stock Exchange (PSE), 66 percent of these towers are situated in Luzon, 19 percent in Mindanao, and the remaining 15 percent are in the Visayas.

The tower assets up for sale are divided into three unique distinct portfolios assigned to three different tower companies representing local and international groups with extensive experience and expertise in telecom tower infrastructure, engineering, and construction, according to the statement. “The tower assets up for sale are composed of 79 percent ground-based towers and 21 percent rooftop towers,” it said.

To MIESCOR Infrastructure Development Corp. (MIDC) for PHP26 billion and with a leaseback arrangement for an initial duration of 15 years, the first portfolio being sold consists of 2,180 telecom towers in Luzon.

With regard to the use of these passive infrastructures, which is essential to its core telecom business, “this extended lease tenor offers Globe with more security and confidence,” it stated.

With a projected pre-tax transaction gain of PHP10.6 billion, its first closing is anticipated to take place during the third quarter of the year, with other closings to follow.

With a similar leaseback arrangement, the second portfolio, which consists of 3,529 towers, will be sold to Frontier Tower Associates Philippines, Inc. for PHP45 billion.

With a pre-tax gain of PHP15 billion, the first closing for this second portfolio is anticipated to take place in the late third quarter, with additional closings to follow.

With another tower operator, Globe is also in “advanced negotiation” regarding the future sale and leaseback of around 1,350 telecommunications towers and associated passive telecom infrastructure.

Globe stated that the sale and leaseback contract with the tower business would likely be signed in the third quarter, with the first closing taking place in the fourth.

There is no guarantee that the ongoing negotiations with the third tower business would result in a binding contract, it was stated.

The sale of these towers is anticipated to be the “biggest ever tower sale and leaseback deal” in the nation once it is complete.

Globe stated that by carrying out the transaction, it “expects to raise a considerable amount of money over the following few quarters.”

It stated that roughly 75% of the proceeds would go toward capital expenses to enable continued network expansion and maintain network performance.

“The remaining 25% will be set aside to fulfill our debt servicing needs through 2023. This would greatly strengthen Globe’s balance sheet overall, provide it the flexibility it needs to effectively compete in this dynamic market, and allow it to further develop its digital ecosystem, the company said.

A joint memorandum agreement to establish the common tower policy was signed in June 2020 by the Department of Information and Communications Technology, the Anti-Red Tape Authority, and other governmental organizations. This policy enables multiple telecom companies to share a single tower and lease their existing towers.

Telcos are anticipated to save money through tower sharing by splitting the cost of maintaining a single tower.

Additionally, it increased the visibility of independent tower companies and other firms that rent towers to telcos.

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