Indonesia telecom player XL Axiata to raise $105m from bond offer to pare debt

Visual from the company website. September 2015

Indonesia mobile telecom operator PT XL Axiata Tbk (EXCL) is seeking to raise up to Rp 1.5 trillion ($104.90 million) by issuing Islamic Bonds (Sukuk) this year, said the company director on Sunday. The bonds issuance is pending approval from the Financial Services Authority and the Indonesia Stock Exchange.

Mohamed Adlan, the company’s finance director, said the bonds will have tenure of two years. He added, XL Axiata has $1.5 billion in debt, most of which will mature in 2017.

Adlan said, the company would seek to convert the US dollar denominated debts to rupiah and extend the payment period to cope with the rising burden from a weakening rupiah.

Besides the bond issue, the second-largest telecommunication operator in the country may also sell some of its tower assets to lower its debt following the loans it took to finance the acquisition of PT Axis Telekom Indonesia. XL Axiata acquired 95% stake of Axis from Saudi Telecom Company for $865 million in the middle of 2015.

To finance the acquisition, XL Axiata secured $500 million in loans from parent company Axiata Group of Malaysia, and it will secure the remaining $365 million in loans from banks. Adlan said, XL can sell Axis’s towers if the company needs a faster means to reduce its debts.

After the acquisition, XL Axiata has about 10,000 telecommunication towers, including about 1,600 owned by Axis. Axis has been posting losses in the past few years and has $865 million in debt.

Fitch Ratings affirmed the ratings of XL Axiata on long-term global debt securities and debt securities of dollars at the BBB level. “Simultaneously, Fitch Ratings Indonesia confirms the long-term national rating at the level XL Axiata AAA (idn) with outlook stable,” said Director of the International FitchRatings Nitin Soni in an official statement.

He explained that the AAA national rating indicates the highest rating given by Fitch Ratings on a national scale ratings for Indonesia. This ranking is pinned to the issuer or issuers of debt with the lowest relative risk prediction over failure to pay debts as compared to other issuers or state bonds.

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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.