Shareholders back Bakrie Telecom share issue

20 Apr 2012

Stakeholders in Indonesian CDMA wireless operator PT Bakrie Telecom yesterday approved a plan to issue new shares equivalent to approximately 10% in the enlarged firm, worth around IDR754 billion (USD81.8 million), to pay off debt and to acquire a stake in fellow CDMA provider PT Sampoerna Telekomunikasi Indonesia (STI). The Jakarta Post reports Bakrie Telecom president Anindya Bakrie as confirming the move and adding that the new shares will be offered at a minimum price of IDR265 per share – a premium on yesterday’s closing price of IDR255. Anindya went on to say that several strategic investors had shown an interest in buying the shares. ‘They are very enthusiastic because they see that the valuation in the rights issue is not the highest value [Bakrie Telecom] has ever achieved. It can be considered as value investing,’ Anindya said.

The official explained that PT Bakrie & Brothers (BNBR), the flagship venture of the country’s influential Bakrie family, along with the Sampoerna Strategic holding and several strategic partners were among the standby buyers interested in the new Bakrie Telecom shares. The telco is currently 17.56% owned by BNBR and 82.44% by the public. If BNBR acquires additional shares – i.e. enough to increase its stake to 19% — it would dilute the public’s ownership in the venture to 71%, Anindya said. Although he declined to name the possible companies involved, he did confirm they would buy new shares equivalent to 6.7% of Bakrie Telecom. In a complex share-swap deal, shares worth about IDR198 billion, or about 2.3% of Bakrie Telecom’s total shareholding, will be given to Sampoerna Telekom and Bakrie Telecom will, in return, receive a 35% stake in Sampoerna Telekomunikasi Indonesia (STI) – which provides a CDMA service called Ceria. Meanwhile, another 50% of the funds from the rights issue will be used to finance capital and operational expenditures at Bakrie and IDR150 billion (or 25%) will be used to make early repayment on IDR650 billion worth of debts that are maturing in September.

Bakrie Telecom recorded gross operating revenues of IDR3.196 trillion in FY2011, down 7.3% when compared to the previous year. This was mainly attributed to falling sales of voice-based services it said, but on the positive side, revenue derived from value added services (VAS) and data experienced 3.9% growth y-o-y, while significant growth from BWA was reported in FY 2011. BWA contributed about 3.2% of total gross revenue in the twelve-month period, up from 0.5% in the previous year – in line with the company’s aim to make BWA the primary future growth driver. The broadband segment generated IDR104 billion in FY 2011, up from IDR18.1 billion a year before. The company’s total assets currently stand at IDR12.21 trillion, with liabilities and equities at IDR7.84 trillion and IDR4.36 trillion respectively. Anindya says that Bakrie expects that the incorporation of STI will help the enlarged group to double its revenues in 2016.

Indonesia, Bakrie Telecom (BTel), Net1 Indonesia