Indonesia telecom operator XL Axiata to raise $110m from Sukuk bonds

XL Axiata meeting.

Indonesia mobile telecom operator PT XL Axiata Tbk (EXCL) has offered a five-series Islamic bond issue, called SUKUK, worth Rp 1.5 trillion ($110.29 million) with coupon rates ranging from 8.25% to 11.15%.

XL’s chief financial officer Mohammed Adlan bin Ahmad Tajudin said on Thursday the funds raised from bond sale will be used to pay license fee for radio frequency spectrum 2G to the government for a one-year period from December 2015.

The Ministry of Communication and Information Technology is expected to decide on the license fee in December.

Also Read: Indonesia XL Axiata to prepay, convert debt to avoid currency volatility

The company launched its bond issue roadshow on Wednesday to gather interest of prospective creditors. The bonds will go on sale from November 25 to 27, pending approval from the Financial Services Authority.

“We not only want to grab SUKUK investors but also (target) conventional investors and to develop a SUKUK market in Indonesia. We are trying to get IDR fixed rate to avoid the rate fluctuation in future,” he said at a press conference.

Also Read: CVC, First Media looking to divest stake in Link Net; in talks with MNC Group, IndoSat, Axiata

XL Axiata sells sukuk, under the ijarah scheme, in which it sells operating rights of its telecommunication equipment to the financiers and leases them back over the bonds’ tenure. The company buys back the right on the bonds due date.

XL Axiata, controlled by Malaysian telecommunications firm Axiata Bhd, is setting aside up to Rp 7 trillion ($514.70 million) next year to develop its 4G network, Adlan said. The company has signed up Swedish telecom firm Ericsson to design and implement its 4G network for Jakarta and West Java over the next three years.

XL Axiata has 46 million subscribers and aims to reach up to 10 million users just for its 4G service by the end of next year. The carrier has 1.2 million 4G users, at present.

Singapore Reporter/s

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

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  • 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. 
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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.