Indosat to raise USD267.5m for financing, network expansion

30 May 2012

The Jakarta Post reports that Indonesia’s second largest telecoms group, Indosat, is hoping to raise up to IDR2.5 trillion (USD267.5 million) when it issues new bonds at the end of June. The monies will be used to finance network licensing fees and an expansion plan, says Iman Rachman, one of the lead underwriters for the bond offering. According to Rachman, the bonds will comprise ‘Series A’ and ‘Series B’ conventional bonds with a maturity of seven and ten years, respectively, along with a tranche of sharia bonds with a maturity of seven years. Indosat is looking to generate around IDR2 trillion from the issuance of conventional bonds, and a further IDR500 billion from the Islamic denominated ones. The Series A and sharia bonds carry an interest rate of 7.8%-8.8% per annum, while the Series B bonds are in the range of 8.1% to 9.1%.

It is understood that approximately 65% of the proceeds from the sale of conventional bonds will be utilised to pay government network licensing fees, a further 25% will be used for purchasing base station subsystems (BSS), and 10% will be to buy back Indosat bonds issued in 2002. The BSS comprises both the base transceiver station (BTS) and base station controller (BSC). Indosat currently operates a total of 15,816 BTS on its national network, in addition to 3,437 Node B (3G BTS). The carrier is the country’s second largest mobile operator by subscribers, with more than 51.5 million customers and a market share of around 21% as at 31 March 2012.

Indonesia, Indosat Ooredoo (incl. IM2)