Indosat
Expects to raise Rp 1.3 trillion from TBIG sales
Mariel Grazella, the
Jakarta Post Business Sat, March 15 2014, 10:28 AM
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operator PT Indosat (ISAT) will be using Rp 1.39 trillion ( USD$122.40 million)
of funds gained from a planned sale of
shares in a tower company to partially pay debt that are due this year.
In an
announcement posted via The Indonesia Stock Exchange (IDX) in Friday, indosat
disclosed that it would be selling its entire 239,826,310 shares in tellecomunication
tower company PT Tower Bersama Infrastructure (TBIG).
Tha Shares,
equivalent to 5 percent of Tower Bersama’s capital, were collected by indosat
in 2012, when the operator sold 2,500 of its towers to Tower Bersama. The latter
paid indosat an upfront fee of $406 million as well as the newly issued shares.
The operator
has appointed Merrill Lynch (Singapore) Pte.Ltd, as its sole placement agent and
SLA Singapore Pte.Ltd. as the co-lead manager. The transaction in scheduled to close next Wednesday.
“we
formally announced our plans to the Financial Services Authority (OJK) today
(Friday), “indosat finance director Stefan Carlsson said. He added that the operator had been considering selling
the shares for the past six to nine month, as the firm never intended to act as
a long-term shareholder or financial investor.
“we took
stake in Tower Bersama during the tower deal to ensure a good partnership with
them, enjoy upside value from the shares.” he said.
Indosat, as the anchor
tenet of the 2,500 towers, had signed new lease agreements, carrying a minimum
period 10 years, with Tower Bersama during the deal.
Meanwhile, Tower
Bersama’s share price hovered around the 3,000 range in 2012. In this sale, however, share’s will be offered at 5,800
apiece.
Carlsson
said the disposal of the shares was so as to meet this year’s funding needs,
especially network expansions. “We have debt maturing and capital expansions as part of our
financial plans, and the sale proceeds will be used to cover a combination of
both,” he
said, adding that sourcing funds from the sale would reduce the firm’s
borrowing figures.
He pointed
out that this year, indosat estimated capital expenses of Rp 8 trillion to Rp 9
trillion in capital, close to the amount spent last year. He further added that the operator faced
approximately Rp 6 trillion in maturing debts this year.
“we are
considering refinancing between Rp 5 trillion and Rp 6 trillion, depending on
our cash flow. “he said, adding that Indosat expected
no “big debt reductions” given the hefty capital costs.
He pointed out that as of 2013, gross debt stood at Rp 27.7 trillion, which would have been 8 percent lower if not for the “accounting” losses due to higher foreign exchange rates.
At the
end of 2013, Indosat reported net losses of Rp 2.782 trillion, despite a 6.4
percent year-on-year increase in revenue to Rp 23.8 trillion, due to foreign
exchange losses of Rp 2.786 trillion.
“However, around Rp 3.9 trillion of our gross debt was not real debt, but financial leasing on the towers. Roughly half of the balance after the reduction was US-denominated debt,” he said.
Note :
Green colour is simple present tense
Blue colour is simple past tense
Red colour is simple future tense
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