Indonesia’s Telkom has unveiled plans to issue a series of bonds next month to raise up to Rp7trn (US$532m) for capex and potential M&A.
Finance director Heri Sunaryadi told reporters that the notes, which will have coupons ranging from 8.91% to…
Indonesia’s Telkom has unveiled plans to issue a series of bonds next month to raise up to Rp7trn (US$532m) for capex and potential M&A.
Finance director Heri Sunaryadi told reporters that the notes, which will have coupons ranging from 8.91% to 11.55%, will include a bond with the longest tenor issued by an Indonesian company at 30 years.
He was quoted saying that about 87% of proceeds will go towards building out telecoms infrastructure, with the rest earmarked for supporting inorganic growth.
The initial phase is higher than the Rp6trn that Sunaryadi told local daily Kontan it was considering in March, when it hired Bahana, Trimegah, Mandiri and Danareksa as underwriters.
The debt is being split into four tranches with different coupon ranges for each maturity: 8.91-10.16% for the seven year notes, 8.96-10.31% for the 10-year, 9.21-11.01% for 15-year, and 9.55-11.55% for the 30-year bond.
It is part of plans to raise Rp12trn from the bond market over two years.
The state-controlled satellite owner is also exploring bank loans to help fund a higher capex this year than it had previously planned.
Alex Sinaga, Telkom’s president director, was recently cited saying that it aimed to increase 2015 capex to 25-30% of last year’s Rp89.7trn revenues, from around 22-25%. The capex boost is being supported by a lower dividend payout.
The first phase of Telkom’s new bond programme will reportedly start trading on Indonesia’s stock exchange on 24 June.
The group, which ordered its latest satellite Telkom-3S in July to replace one that was destroyed in a rocket crash in 2012, was unable to comment before the press deadline.
