Indosat seeks to raise Rp 3 trillion ($226 million) from a bond sale in May to repay debt, expand its mobile network and pay frequency spectrum usage fees. (JG Photo/Yudhi Sukma Wijaya)

Indosat Eyes Rp 3t From Bond Sale in May to Repay Debt, Expand Network


APRIL 26, 2017

Jakarta. Indosat, Indonesia's second-largest telecommunications operator, plans to raise Rp 3 trillion ($226 million) from a bond sale next month to repay debt, expand its mobile network and pay frequency spectrum usage fees to the government.

The company – controlled by Qatari telecommunications giant Ooredoo – will seek to raise Rp 2.7 trillion from the sale of conventional bonds and Rp 300 billion from Islamic bonds, or non-interest accruing bonds, in 370-day, three-year, five-year, seven-year and 10-year tranches, Indosat said in a brief prospectus published on Wednesday (26/04).

Indosat said about three quarters of the proceeds from the bond sale will be used to repay several recent loans. The company plans to dish out Rp 800 billion to Bank Central Asia; Rp 570 billion to Bank Sumitomo Mitsui Indonesia; Rp 400 billion to Bank CIMB Niaga; and Rp 250 billion to Bank Mizuho Indonesia.

The company will use around 18 percent of the proceeds to purchase base station subsystems to increase its capacity in high-traffic areas and improve network coverage.

The remainder of the proceeds will be reserved to pay fees owed to the government. Indosat will conduct book building from April 27 to May 10 to gauge investor interest in its bonds. The company plans to sell the bonds on May 24-26, before listing them on the Indonesia Stock Exchange (IDX) on June 2.

BCA Securities, Mandiri Sekuritas, Danareksa Sekuritas, CIMB Sekuritas Indonesia, DBS Vicker Sekuritas Indonesia and Indo Premier Securities will act as underwriters.

The telecoms operator had about 82 million mobile subscribers last year, compared with Telkomsel's 170 million. Indosat's other main rival, XL Axiata, which is controlled by Malaysia's Axiata, currently has 47 million subscribers.