Telecom and satellite operator Indosat is considering divesting up to 14,000 towers for about US$1.4bn, according to media reports.
The sale is expected to take place in the next few months, although an Indosat director, Fadzri Sentosa, was quoted as…
Telecom and satellite operator Indosat is considering divesting up to 14,000 towers for about US$1.4bn, according to media reports.
The sale is expected to take place in the next few months, although an Indosat director, Fadzri Sentosa, was quoted as saying that the company is still evaluating its options on whether to sell or retain its towers.
Sentosa also said the operator has appointed Citigroup as a strategic adviser on its tower assets. The potential bidders for the towers include state-owned telco PT Telkom, which may soon sell its CDMA assets to Bakrie Telecom, and tower operator Tower Bersama Infrastructure, which recently got a US$350m financing and is set for a US$202m IPO.
A few weeks ago, Indosat reportedly said it was open to all forms of telecoms sector M&A. The company also made some moves in the satellite segment recently. Early September, Indosat teamed up with PT Telkom to order a new satellite that is to be located at 150.5E.
The new satellite is expected to replace two existing craft, Indosat’s Palapa-C2 and Telkom-1, both of which are set to be decommissioned in 2014, according to local reports. The two companies ordered the satellite together in order to reduce their individual cap ex costs. The overall cost of the satellite has not been announced but is expected to be in the region of US$200m, depending on the size of the payload.
Indosat has two satellites in orbit, Palapa-C2 and Palapa-D, which was launched in August 2009 but failed to reach the intended orbit following a malfunction in the firing of the third stage in the Long March rocket carrying it. Telkom operates Telkom-1 and Telkom-2. The company is also expected to launch Telkom-3, which is under construction by ISS Reshetnev, in August 2011.
In a separate report, it was announced last August that Indosat completed a US$650m 10-year senior unsecured bond offering. The fixed-rate note, which is non-callable in the first five years, carries a coupon of 7.375% and priced at 99.478 to yield 7.45%. Joint bookrunning managers for the sale were Citigroup, Deutsche Bank, HSBC and RBS. The money will be used to fully repay two dollar-denominated notes due 2010 and 2012.
