Globe Telecom to borrow P7B from BDO to fund capex and pre-pay debts

MANILA, Philippines — The Ayala-led Globe Telecom Inc. is borrowing P7 billion from Banco de Oro Unibank (BDO) for the refinancing of maturing obligations and to fund expansion projects in 2011.

In a disclosure, the country’s second largest telecommunications firm said it wanted to take advantage of low interest rates offered by banks today.

“We intend to use the BDO facility to fund our capital expenditure (capex) requirements this year and prepay up to P3 billion in loans that originally mature in 2012. The current low interest rate environment allows us to replace these loans with cheaper debt, generating savings for the company,” said Albert De Larrazabal, Globe Telecom’s chief financial officer.

In 2010, the company had a capex of about $500 million. Globe president and CEO Ernest Cu has said the firm plans to spend a similar amount, or even less, in 2011. (report from Paolo Montecillo, Philippine Daily Inquirer)