Tower Bersama (TBIG) Issues Bonds of IDR 2.7 Trillion, Buy or Sell?

STOCK TO WATCH - JAKARTA. PT Tower Bersama Infrastructure Tbk (TBIG) will issue bonds worth IDR 2.7 trillion. This Continuous Bond VI Tower Bersama Phase III Year 2024 is part of the Continuous Bond VI Tower Bersama Infrastructure with a total target value of IDR 20 trillion.

In this third phase, Tower Bersama will issue bonds with a tenor of 370 days. TBIG offers a fixed interest rate of 6.75% per year.  

The Finance Director of Tower Bersama Infrastructure (TBIG), Helmy Yusman Santoso, said that the issuance of bonds worth IDR 2.7 trillion is merely a refinancing loan.

“All funds obtained from the public offering of bonds, after deducting issuance costs, will be used for refinancing," wrote the management in the prospectus of the Indonesia Stock Exchange (IDX) disclosure information, quoted Monday (22/1). 

Read Also: Technical Stock Recommendations for BBTN, HRTA, PGAS for Today's Trading

TBIG will allocate IDR 1.01 trillion to fund all obligations in the plan to repay all the principal of the Continuous Bond IV Tower Bersama Infrastructure Phase III Year 2021 Series B. This bond will mature on February 17, 2024.

"Furthermore, the remainder of IDR 1.66 billion will be used to partially fund TBIG's obligations in the plan to repay all the principal of the Continuous Bond V Tower Bersama Infrastructure Phase VI Year 2023, which will mature on February 27, 2024," said the management.

Helmy predicts that TBIG's performance will improve in line with digitalization in Indonesia. Moreover, TBIG's performance has recovered since the third quarter of 2023. 

"Our debt and capital ratio is very healthy in 2024," Helmy told Kontan.co.id, Monday (22/1).

Read Also: Peek at Stock Recommendations and IDX Composite Projections for Today (1/23))

Head of Equity Research Kiwoom Securities Indonesia, Sukarno Alatas, said that capital is crucial for tower issuers. This is because tower issuers need a large amount of capital to build and operate telecommunications towers. In addition, tower issuers also need to invest in new technology to improve their service quality.

"Therefore, tower issuers need to continuously seek cheap and sustainable funding sources. The issuance of continuous bonds is one of the alternative funding that can be utilized by tower issuers," Sukarno told Kontan.co.id, Monday (22/1).

Sukarno said, the performance prospects in the tower issuer sector in 2024 are still positive. TBIG's performance always has the opportunity to grow in line with expectations of a decrease in interest rates. This is because the debt ratio of tower issuers is quite large.

Sukarno also gave a trading buy recommendation for TBIG shares, with a target price of IDR 2,100 per share.

MNC Securities analyst Herditya Wicaksana gave a trading buy recommendation for TBIG shares with a target price of IDR 1,885 per share-IDR 1,960 per share.