Malaysian telecoms company Axiata Group (formerly Telkom Malaysia International) has revealed its 83.8%-owned Indonesian mobile subsidiary PT Excelcomindo Pratama (XL) is looking to raise between USD300 million and USD600 million this year to fund its recapitalisation. Axiata chief financial officer Yusof Annuar Yaacob told journalists that XL would most likely raise the money through a rights issue. The parent hopes the recapitalisation exercise will help XL improve service quality, as well as increase network capacity and coverage, and also allow it to repay debt. The rights issue could take place as early as June, Axiata said.
Earlier this month, TeleGeography’s CommsUpdate reported that XL posted first-quarter net losses of IDR306 billion (USD29.1 million), reversing a net profit of IDR368 billion a year earlier, and blamed the swing on forex losses and interest expenses. The nation’s third largest mobile operator by subscribers said the sharp drop in net income was largely the result of higher foreign exchange losses and interest expenses. As at 31 March 2009, the cellco had IDR643 billion in foreign exchange losses due to the weak rupiah. XL also booked IDR383 billion in interest expenses, significantly higher than a year earlier. ‘Excluding foreign exchange losses and interest expenses, we could have had a net profit by the end of March of around IDR15 billion,’ said XL President Hasnul Suhaimi.