Tower Bersama plans buyback as share prices plunge

JAKARTA. Telecommunications tower operator PT Tower Bersama Infrastructure (TBIG) has said in a statement that it plans on buying back a maximum of 239.8 million shares or 5 percent of its enlarged shares from July 25 through Jan. 24, 2015.

In the statement published on Monday, the publicly listed company said it plans to keep the shares as treasury stocks for a three-year period.

However, it may release the shares at any time by carrying out several measures, including by selling them on the bourse or outside the bourse, or by implementing the employee stock option plan.

Tower Bersama will allocate a maximum Rp 1.44 trillion (US$145 million) for the buyback.

The company’s finance director, Helmy Yusman Santoso, said funds for the buyback would come from its internal cash and that the buyback process would take place in several phases.

Its financial report ending in December 2012 was used as the basis for the buyback process. As of Dec. 31, 2012, it had Rp 14.32 trillion in total assets. Its liabilities and equities amounted to Rp 10.07 trillion and 4.25 trillion, respectively, and its cash and cash equivalents stood at Rp 507.25 billion.

Tower Bersama is slated to hold an extraordinary general shareholders meeting on July 24 to secure approval for the buyback plan.

“We are in the process of selecting the brokerage firm to carry out the process. We will have already appointed the firm by the time we hold the shareholders meeting,” Helmy said when contacted by telephone.

According to the statement, shares will be bought back from the market and their offering price will be set lower or at the same level as the shares’ closing price in the previous day.

Following the buyback, the public’s ownership will be reduced to 32.48 percent from 37.48 percent.

Meanwhile, PT Saratoga Infrastruktur, PT Provident Capital Indonesia and PT Wahana Anugerah Sejahtera will continue to control 12.76 percent, 23.41 percent and 24.91 percent stakes in the company, respectively.

Contacted separately, Trust Securities analyst Reza Priyambada said a company usually buys back its shares in an effort to prevent further share price declines.

However, he questioned Tower Bersama’s decision to conduct the buyback in July. “Why don’t they do it now?”. Tower Bersama’s share prices have fallen since its peak at Rp 6,100 on April 3.

It means that until last Friday, its shares had dropped 25.8 percent to Rp 4,525 per share,” he said.

The last time Tower Bersama’s share prices reached the Rp 4,500 range was last October. According to Reza, share prices may rebound or increase by next month.

“The prices rebounded slightly today, triggered by the buyback news. It shows that many investors tried to take advantage by entering the market,” Reza said.

During the first three months of 2013, Tower Bersama’s revenues grew almost double to Rp 617.63 billion while its net profits jumped 98.2 percent to Rp 281.08 billion.

Tower Bersama’s shares closed at Rp 4,600 on Monday, up 1.7 percent from last Friday. (Tassia Sipahutar, The Jakarta Post)