Indonesia’s Tower Bersama Infrastructure (TBIG) has reached an agreement with Telkom Indonesia (Telkom) to acquire a 49% stake in its tower unit Mitratel in a share-exchange deal.
State-controlled Telkom will initially swap the 49% stake in Mitratel,…
Indonesia’s Tower Bersama Infrastructure (TBIG) has reached an agreement with Telkom Indonesia (Telkom) to acquire a 49% stake in its tower unit Mitratel in a share-exchange deal.
State-controlled Telkom will initially swap the 49% stake in Mitratel, which owns and operates 3,928 towers serving 4,363 tenants, for 290 million new TBIG shares, representing about 5.7% of its enlarged share capital.
Indonesia-listed TBIG, majority-owned by Saratoga Capital and Provident Capital, will then assume management control of Mitratel and consolidate it into its accounts.
The incumbent telco has a two-year option to exchange its remaining 51% stake in the tower unit for an extra 472.5 million TBIG shares, which would boost its stake in the infrastructure company to 13.7%.
In addition, Telkom will receive a cash consideration of up to Rp1.739trn (US$142.36m) provided Mitratel reaches certain performance targets.
TBIG CEO Hardi Wijaya Liong said the company views its new strategic partnership with Telkom as a “major milestone”.
“This partnership not only allows us to significantly add to the current scale of our business, both from a tenancy and revenue perspective, as well as our geographical footprint, but it also strengthens the business relationship between TBIG and the Telkom Group.”
The companies expect the deal, which is subject to various approvals including those of TBIG shareholders, to close in Q4 this year.
Telkom president director Arief Yahya first revealed plans to sell a 49% stake in Mitratel to allow it to focus on its core business in July last year.
The deal marks the second large tower deal in Indonesia this month. In early October, mobile operator XL Axiata agreed to sell 3,500 towers to local towerco Solusi Tunas Pratama for US$460m in a sale-and-lease-back deal.
TBIG claimed to own and operate 11,266 telecoms sites serving 18,028 tenants as of 30 June 2014.
