The funds will be channelled into the expansion of Globe's mobile and broadband networks and debt repayments. The common shares for this offer will be issued out of the increase in the company’s authorised capital stock, which was approved by Globe’s board and shareholders on 25 April 2022, and 26 April 2022, respectively.
Globe reported a 27% increase in network traffic in Q1 against the same period last year. This growth was buoyed by the increased smartphone penetration in the network, which grew from 81% in 2020 to 85% in 2021 and led to an increase in per person data usage of 22%. However, Globe sees latent demand in the market as the country still lags its neighbours.
Globe has already spent close to ₱250 Billion in capital over the last four years and is committing to invest a further ₱89 Billion in 2022.
CFO Rosemarie Maniego-Eala (pictured) said: “This marks the first time Globe will do a rights offer in the capital market in over two decades and shows the principal shareholders’ confidence in the company and its plans going forward. 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 digitalisation.
"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. This effort will also further strengthen our balance sheet and empower us to further develop adjacent businesses that will enable the Filipino digital lifestyle.”
Some of the funds raised will also go to the expansion of Globe's digital ecosystem as the firm continues to capitalise on opportunities in and beyond telco, for example in mobile money and other areas. Maniego-Eala recently shared details of this strategy with Capacity.
Globe's fintech platform GCash reached 60 million registered users in March of this year, and it is further pursuing digital health through healthcare apps KonsultaMD and Healthnow; adtech through award-winning 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.
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.
