ISAT to sell off Tower Bersama shares by Q1, 2014

JAKARTA. Mobile network operator PT Indosat (ISAT) aims to sell its minority stake in telecommunications tower company, PT Tower Bersama Infrastructure (TBIG), by the first quarter of next year as share prices have held up.

“We plan to dispose of the stake by the first quarter of 2014,” Indosat finance director Stefan Carlsson said.

Indosat came into ownership of the stake when it sold 2,500 of its towers to Tower Bersama in August 2012. Indosat was paid US$406 million, which consisted of cash and 239,826,310 newly issued shares in the tower operator, or equal to 5 percent of Tower Bersama’s enlarged capital.

Carlsson added that Indosat would enlist the services of a bank to help the operator sell its stake.

“We have held a tender among eight to 10 banks,” he said, adding the participants were “mostly foreign banks”.

“We will only need one bank, which we will make final decision in January,” he said, declining to provide additional details.

He added that the mobile network operator was moving on with plans to sell its stake in Tower Bersama in order to focus more on its core business.

“We are not a financial investor, but a telecommunications operator,” he said.

He added that the mobile network operator initially secured the stake in Tower Bersama to ensure that the handing over of operations of the acquired towers ran smoothly, besides looking to gain additional value from future upsides in share prices.

“Now that operational relations are running very well and the shares have developed equally well, it is time to monetize our stake for our business,” he pointed out.

Indosat has been under financial pressure. Although revenues grew by 9.4 percent year-on-year to
Rp 17.8 billion ($1.46 million) in the first nine months of 2013, the operator booked a net loss of Rp 1.7 trillion mainly due to a Rp 2.3 trillion foreign-exchange loss.

The operator booked nearly $1 billion in foreign-denominated debt as of the first half of the year. It previously pointed out that
every 1 percent decline in the rupiah against the US dollar triggered a Rp 100-billion surge in its debt.

Meanwhile, the shares of Tower Bersama have been fluctuating over the past 12 months. The share price was Rp 5,550 on Dec. 26, 2012, and dipped to Rp 4,525 on June 21, 2013. The share price then rebounded, peaking at approximately Rp 6,600 on Aug. 15.

Carlsson added that the firm’s option to monetize the remaining 7,500 towers it owned remained open.

“We still have 7,500 towers to sell and we can sell them all if we wanted to,” he said.

He added that currently, the towers were valued at approximately $165,000 each.

“Multiplying $165,000 by 7,500 towers will give you a rough idea of the overall value,” he further said. (Mariel Grazella)