Indonesia’s Protelindo, a telecom tower company backed by Djarum Group, and state-owned Telkom Group, have evinced interest in acquiring a few telecom tower assets of Indosat Ooredoo, said three persons privy to the development.
The due diligence process is currently going on and if talks fructify, the transaction will be completed this year.
As previously reported by DealStreetAsia, Indosat Ooredoo is in talks to sell around 3,000 telecom towers assets and is being advised by JP Morgan. The company owns around 8,000 towers.
While the exact deal size could not be ascertained, the total valuation of the transaction is being pegged at over $300 million, a source had earlier indicated. The figure, he had said, had been arrived at by taking into consideration the average value of each tower at around $100,000-200,000.
It is understood that Indosat Ooredoo will continue to be the leaseholder of the assets even after the sale, said one of the persons mentioned above. Therefore, the valuation of the towers will also depend on the rental being proposed by Indosat Ooredoo. The telecom company is currently reviewing the towers to see which ones are up for sale.
The sale of tower assets is believed to be Indosat Ooredoo’s strategy to fulfill the capital expenditure requirement.
In May 2019, the company had reportedly underlined a slew of options to raise external funds to meet a planned capital expenditure of $2 billion over the next three years. And, in this regard, it is understood that the company has been exploring options including issuing corporate bonds or rights, raising additional capital from its shareholders, or selling the telecom towers.
When contacted, Turina Farouk, SVP-head corporate communications, Indosat Ooredoo said that the company will not comment on market rumours. “Indosat Ooredoo will focus to accelerate the company’s growth, as well as to provide the best experience for our customers,” added Farouk.
Telkom Group spokesperson, on the other hand, said the company has not taken any decision on acquiring Indosat Ooredoo’s towers assets. “The company will announce any corporate action or other partnerships, in accordance with applied regulations.”
Meanwhile, a message and email sent to Protelindo executives did not elicit any response.
In February 2012, Indosat Ooredoo sold 2,500 towers to local company Tower Bersama Infrastructure and its subsidiary Solusi Menara Indonesia for 4.76 trillion Rupiah ($519 million).