Several banks, including Deutsche Bank, HSBC and China Development Bank, are reportedly hesitant about restructuring a US$1.2bn loan backed by Saudi Telecom (STC) as they could face losses of up to US$600m.
Citing banking and industry sources, Reuters…
Several banks, including Deutsche Bank, HSBC and China Development Bank, are reportedly hesitant about restructuring a US$1.2bn loan backed by Saudi Telecom (STC) as they could face losses of up to US$600m.
Citing banking and industry sources, Reuters reported that STC has asked lenders to restructure a US$1.2bn loan, secured in 2011 by its Indonesian subsidiary Axis, to reflect its true value of US$600m-US$800m.
At the time, STC backed the shariah-compliant loan. But Axis has since seen its performance decline and the Indonesian operator is now in breach of some of the loans’ terms, four sources familiar with the matter were quoted as saying.
The lenders are now reportedly considering other options to recover their money.
The situation could disrupt STC’s plan to sell Axis, as the Saudi operator needs the consent of the creditor banks, according to the report.
In late July, local newspapers suggested that STC had been in talks to sell Axis to rival Indonesian carrier XL Axiata.
STC, which has an 80.1% direct stake in Axis, opted for a sale following poor performance of the unit, which posted SR226.4m (US$71m) in revenues for the first three months of 2013.
Axis – a medium-sized carrier reportedly valued at about US$1bn including debt – operates in a highly-competitive mobile market, home to 10 companies.
STC and the lenders were not immediately available for comment.
