Indonesia telecom operator Indosat to raise $263m via bonds, to refinance debt

Photo by indosat

Mobile operator PT Indosat Tbk (ISAT) is on course to raise a total of Rp 3.46 trillion ($263.7 million) through a bond issuance, with coupons set at between 7.5 per cent and 9.15 per cent. The bonds comprise a regular note of Rp 3.17 trillion ($241 million) and an Islamic bond of Rp 288 billion ($21.9 million).

Indosat management said, a large part of the proceeds will be used to refinance debts from a number of creditors. These lenders include BCA, BNI, BNP Paribas Indonesia, Sarana Multi Infrastruktur, Indonesia Infrastructure Finance, Bank of Tokyo-Mitsubishi UFJ, Bank Mizuho Indonesia, Bank Sumitomo Mitsui Indonesia, and Bank CIMB Niaga.

“The funds gathered from the Islamic note will be used to pay for the spectrum license fees (BHP),” said the management.

The bonds have been assigned the rating of AAA by Fitch Ratings Indonesia. The rating also takes into account the sukuk’s structure and documentation.

“Fitch considers Indosat Ooredoo’s intentions to support its sukuk obligations. Fitch’s rating for the certificates reflects the agency’s belief that Indosat Ooredoo would stand behind its obligations,” said the rating agency in an official release.

Fitch predicts Indosat’s revenue to grow by the mid-single-digits in 2016-2017, with operating EBITDAR margin of around 42% in 2016-2017. Competition is also expected to stabilize as smaller telecom firms focus on profitability.

Indosat posted a net profit of Rp 428.1 billion in the first half this year, compared with a net loss of Rp 733.8 billion in the same period last year. The surge in net profit came from Indosat’s reduced US dollar-denominated debts, from $1.16 billion to $227.5 million.

Revenues during the first six months were booked at Rp 13.94 trillion, up 10.5 per cent compared to Rp 12.62 trillion last year. Meanwhile, EBITDA grew 12.6 percent with a margin of 43.3 per cent.

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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.