Indonesia’s XL Axiata plans to raise funds via rights issue

Photo by XL Axiata

PT XL Axiata Tbk (EXCL), the third largest telecom company in Indonesia which is 66.45 owned by Malaysia’s Axiata Group, is planning to launch a rights issue. The proceeds from this issue will be used to service the shareholder loan of $500 million.

The company said in a statement that the rights issue is pending shareholders’ approval at company’s upcoming extraordinary general shareholders meeting scheduled for March 10 as well as effective letter from the regulator Financial Services Authority (FSA).

The capital raising has been structured as a rights issue in order to allow existing shareholders of XL to participate in the future growth of the company, it said.

The company’s parent firm, Axiata Group, has expressed its intention to fully subscribe for its pro rata rights entitlement under the rights issue. Any remaining shares not subscribed by other shareholders in the rights issue are expected to be fully underwritten.

Commenting on the rights issue, president director and CEO of XL, Dian Siswarini said “We have seen solid progress and momentum with our transformation agenda launched in 2015. In addition, we have proactively embarked on balance sheet management Initiatives to strengthen our financial position and reduce exposure to foreign exchange volatility.”

“The rights issue is an important step in strengthening our foundation as we embark on the next chapter in our transformation agenda. Net proceeds from the rights issue will be used to repay our U.S. dollar denominated shareholder’s loan,” Dian said.

The rights price will be jointly determined and fixed by the Board of XL Axiata and Standby Purchasers. The terms of the rights issue, including the price of shares relating to the rights offering and the final number of shares to be offered will be announced in due course.

The company has appointed Credit Suisse and PT Mandiri Sekuritas as financial advisors for the rights issue.

The company also announced its audited results for the 2015 financial year ended 31 December 2015. XL Axiata posted its third consecutive quarter of revenue growth with 2 per cent quarter-on-quarter (QoQ) in fourth quarter 2015 driven by growth in the core usage revenue of 2 percent QoQ with a solid performance by the Data (up 15 percent QoQ) segment.

Dian said “We have ended 2015 on a positive note with further improvements in our operating and financial performance and we hope to build on the foundations we have laid this year and deliver a stronger performance in 2016.”

“The biggest improvement was in earnings before interest, tax, depreciation and amortization (EBITDA) which increased 6 per cent QoQ to Rp2.3 trillion resulting in an EBITDA margin of 39 per cent up 1 percentage point QoQ,” she noted.

The increase was mainly due to positive impacts from the reshape of the customer base to focus on the more profitable subscribers as well as efforts to improve profitability of the product portfolio. This is also the third consecutive quarter of EBITDA and EBITDA margin improvement.

Data traffic grew by 54 per cent YoY in 2015 compared with the same period last year with total data users at 22.5 million or 54 percent of the total base.

The growth of smartphones has successfully driven the increase in Data adoption in Indonesia. XL’s smartphone penetration has grown to 42 per cent of its base as at end 2015. XL smartphone users grew 10 per cent YoY and reached 17.7 million users in the year.

Also Read:

Indonesia: XL Axiata mulls $500m fundraising to strengthen balance sheet

Indonesia: SmartFren Telecom targets 5m subscribers; Investors eye XL Axiata towers

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.