Globe Telecom Inc. is raising P32 billion via stock rights offer for the expansion of its mobile and broadband network and to pay its debts.
“This marks the first time Globe will do a rights offer in the capital market in over two decades," according to Chief Finance Officer Rizza Maniego-Eala following the approval by Globe's Board of the stock rights offer on Monday, June 20.
The proposed Stock Rights Offer will also enable Globe to expand its digital ecosystem and further differentiate itself in the market, as it capitalizes on opportunities in and beyond telco.
The common shares for the offer will be issued out of the increase in the company’s authorized capital stock, which was approved by Globe’s Board of Directors and Shareholders on 25 April 25 and 26 April 2022, respectively.
With connectivity becoming an essential part of our customers lives, Globe’s products and services are now more important than ever.
Globe has seen data traffic in its network grow significantly, with the first quarter of 2022 reporting a 27 petcent increase against the same period last year.
This growth was buoyed by the increased smartphone penetration in the network, which grew from 81 percent in 2020 to 85 percent in 2021 and led to an increase in per person data usage of 22 percent.
Despite this increase, Filipino data usage still lags behind neighboring countries and there is still latent demand in the market today, Globe noted.
To support this fast growing demand, Globe has been continuously investing in its network, spending close to ₱250 billion in capital over the last four years and committing to spend another ₱89 billion in 2022.
Capitalizing on the data trend, Globe has likewise invested in businesses adjacent to the telco sector, like its fintech platform, GCash, which reached 60 Million registered users in March 2022.
In addition to fintech, the Company has founded and is pursuing digital health through healthcare apps KonsultaMD and Healthnow; adtech through awardwinning digital media agency Adspark; e-commerce solutions through leading loyalty solutions provider Rush and online grocery platform PureGo; business solutions through multi-channel communications platform M360; and recently, entertainment by supporting Kroma Entertainment.
These initiatives are a testament to the company’s conscious move to become a total digital solutions platform, and a well-timed response in the face of the accelerated shift of Filipinos towards digitalization.
The company believes there are still significant growth opportunities in the wider ecosystem, which Globe is well-positioned to take full advantage of to further improve its market position.
"We believe there is excitement in the market for Globe's future prospects and potential amid the massive demand for data-related services as more Filipinos are now embracing the benefits of digitalization," said Eala.
"This capital raise will also provide Globe added flexibility to properly compete as we aim to continue delivering quality services to our millions of customers and keep our leadership position in the country," she maintained.
"This effort will also further strengthen our Balance Sheet and empower us to further develop adjacent businesses that will enable the Filipino digital lifestyle.”
The increase in capital stock, the Stock Rights Offer and the listing of the Shares on the Philippine Stock Exchange are each subject to the relevant regulatory approvals.
Globe expects to launch the Stock Rights Offer after receiving the required approvals, under favorable market conditions.Singapore Telecom International Pte. Ltd, a wholly owned subsidiary of Singtel, and Ayala Corporation, Globe’s principal shareholders, have both indicated their support for the Stock Rights Offer.