BTel unveils debt restructuring plan, paper says

25 Nov 2014

The Jakarta Post reports that Indonesian CDMA operator Bakrie Telecom (BTel) has outlined debt restructuring proposals, including plans to pay back its creditors in instalments and also provide debt-to-equity swaps. The move follows a recent ruling from the Jakarta court ordering the telco to renegotiate a restructuring plan with its creditors by 9 December; in October this year, BTel supplier Netwave Multi Media filed forms for a court-supervised debt restructuring process against the carrier which owes it IDR4.7 billion (USD387,000) in unpaid bills. In a filing to the stock exchange yesterday, BTel said: ‘The liability settlement scheme through steady cash payments will be divided among several groups [of creditors] according to the size of the obligations’. It is unclear whether Netwave will agree to BTel’s debt proposal.

According to Telegeography’s GlobalComms Database, earlier this month BTel and fellow CDMA wireless service provider Telekom PT SmartFren (Smartfren) confirmed plans to merge their respective network operations in a tie-up that will make the former one of Smartfren’s shareholders. While neither side has divulged the value of the deal, nor indeed the size of the equity stake BTel will own, upon completion it intends to lease part of Smartfren’s network to serve its own customers. The move comes in the wake of BTel’s escalating financial woes: the carrier is also being sued by three bondholders in New York for its alleged failure to make two interest payments on a USD380 million bond. BTel booked gross revenue of IDR928 billion in the first six months of this year, down sharply by 28.9% from IDR1.31 trillion in H1 2013, as net revenue also slumped 30.5% year-on-year to IDR773 billion. Net income (loss) for the six months under review was IDR316.8 billion, on the back of a sizeable IDR292.7 billion loss in the corresponding year-earlier period. The plummeting net income came despite the operator booking a profit of IDR210.7 billion in Q1 2014; BTel’s second trimester saw it record a massive loss of IDR527.6 billion to wipe out the earlier gains.

Indonesia, Bakrie Telecom (BTel)