STI buys stake in Bakrie Telecom

15 Mar 2012

Indonesia’s fourth largest telco by subscribers Bakrie Telecom has sold a 10% stake in the company to Sampoerna’s telecom unit, Sampoerna Telekomunikasi Indonesia (STI), as part of a share swap deal between the two CDMA operators. In a joint statement yesterday, the pair confirmed that STI will acquire 10% of Bakrie Telecom for USD90 million, and in return Bakrie will take a 35% stake in STI through the share swap deal that includes options for it to become the majority shareholder in the venture in the next three years. Commenting on the transaction, Bakrie Telecom CEO Anindya Bakrie said: ‘Both Bakrie Telecom and STI’s shareholders agreed to integrate the two business operations under one management in Bakrie Telecom. The new Bakrie Telecom aims to accelerate the penetration of true mobile convergence offerings for every customer in Indonesia.’

Bakrie Telecom owns and operates a CDMA network in the 800MHz band, under the brand name Esia, and controls around 40% of the CDMA market in the areas of Jakarta, Banten and West Java. For its part, STI owns 7.5MHz of frequencies in the 450MHz band for its Ceria brand, which is marketed primarily in rural areas in Java, Sumatra, the Nusa Tenggara islands and Bali. A report in The Jakarta Post says that Bakrie Telecom plans to hold an extraordinary general meeting within a month to seek approval of a non pre-emptive rights issuance of up to 10% with an estimated value of USD90 million. ‘Not all non pre-emptive rights of 10% will be swapped. We will use part of the proceeds from the new shares to pay mature debts of IDR650 billion [USD72 million], and to further invest in data connectivity,’ Anindya said.

Indonesia, Bakrie Telecom (BTel)