Indonesia’s second-largest mobile operator XL Axiata has decided to sell 3,500 towers to local towerco Solusi Tunas Pratama (STP) for Rp5.6trn (US$460m) in a sale-and-lease-back deal.
The consideration for the sale will be entirely in cash and paid at…
Indonesia’s second-largest mobile operator XL Axiata has decided to sell 3,500 towers to local towerco Solusi Tunas Pratama (STP) for Rp5.6trn (US$460m) in a sale-and-lease-back deal.
The consideration for the sale will be entirely in cash and paid at closing, which is expected to take place by 31 December, XL Axiata said in a statement.
The tower-lease agreement will see XL Axiata lease back the 3,500 towers for 10 years. The operator, majority-owned by Malaysian giant Axiata, said it has secured competitive terms as the towers’ “anchor tenant” and expects to benefit from ongoing capex and opex savings.
XL Axiata CEO Hasnul Suhaimi described the transaction as a step towards an “asset-light strategy” which will allow the company to focus on its core business.
“The sale unlocks the value of a part of our tower portfolio at an attractive valuation and on competitive terms.”
The company will use the proceeds to help deleverage, he noted.
STP president director Nobel Tanihaha said his company is pleased to gain a quality tower portfolio with significant secured tenancies and potential for further leases, noting that the transaction is Indonesia’s largest tower deal to date.
“This transaction solidifies STP’s position as a top-three independent tower operator with a strong tower portfolio across Indonesia.”
STP claimed to own and operate over 2,786 towers in Indonesia prior to this transaction.
Merrill Lynch acted as XL Axiata’s exclusive financial adviser on the deal, while Standard Chartered and JP Morgan provided financial advice to STP.
XL Axiata confirmed in July that it planned to offload some of its infrastructure in the second half of the year to repay part of its debt. The operator, which claims to serve 62.9 million customers nationwide, wrapped up its acquisition of smaller rival Axis Telekom for US$865m in March. Its total liabilities were up 93% year-on-year at the end of H1 to Rp45.4trn (US$3.74bn), largely due to borrowings related to the acquisition.
Tower Bersama, another local towerco, had also expressed interest in the XL Axiata towers. Other rumoured suitors included Sarana Menara Nusantara and Inti Bangun Sejahtera.
Another Indonesian operator, Indosat, has also been considering options for its remaining 7,500 towers, after selling 2,500 sites in 2012.