Indonesian mobile operator Bakrie Telecom has yet to raise the funding it needs to repay Rp650bn (US$68.8m) worth of facilities maturing in September.
Bakrie’s finance director Jastiro Abi told the Jakarta Post that, in April, the company tried to…
Indonesian mobile operator Bakrie Telecom has yet to raise the funding it needs to repay Rp650bn (US$68.8m) worth of facilities maturing in September.
Bakrie’s finance director Jastiro Abi told the Jakarta Post that, in April, the company tried to secure Rp754bn (US$79.8m) from a rights issue as well as a US$50m loan.
By mid-June, Bakrie had only raised Rp150bn (US$15.8m) from affiliated investment company Bakrie Global, he said.
But the operator is now trying to secure loans with Credit Suisse and that a deal could be reached this month.
Yesterday (18 July), rating agency Fitch placed Bakrie’s ‘CCC’ long-term foreign- and local-currency issuer default ratings on Rating Watch Negative (RWN). Its US$380m senior unsecured bond, rated ‘CCC’, was also placed on negative watch.
“The RWN reflects heightened liquidity risk associated with the repayment of its Rp650bn, due 4 September 2012, and ongoing finance lease obligations. At-end March 2012, [Bakrie’s] liquid assets comprised only Rp215bn unrestricted cash and equivalents and the company has yet to secure sufficient committed additional funds,” Fitch commented.
The agency added that the company would likely struggle to secure more debt given its “weak financial performance.”
It also said: “Its strategic tie-up in March 2012 with [Ceria Mobile], including the acquisition of a 35% stake in [Ceria Mobile] through an equity swap, is unlikely to materially improve [Bakrie’s] financial strength or competitive position.”
In mid-March, Bakrie had entered a share swap deal with Ceria Mobile, the mobile subsidiary of local conglomerate Sampoerna.
Under that deal, Bakrie was expected to sell a 10% stake in itself to Ceria. In turn, it would acquire a 35% stake in the mobile company.
Bakrie could not be reached for comment before the press deadline.
