Indonesia’s First Media, the media arm of local conglomerate the Lippo Group, says it is increasing its capital expenditure budget for 2015 by 20% to IDR1.2 trillion (USD97.6 million). According to the group’s co-CEO Irwan Djaja, the funding will be targeted at the expansion of its residential broadband internet coverage. Next year, First Media – which owns the internet service provider (ISP) LinkNet – intends to roll out a further 250,000 high speed connection in areas including Jakarta, Bandung, Surabaya and Denpasar, boosting its current subscriber base which reached 1.35 million at end-September.
First Media also said this week that it may sell more shares in LinkNet to raise funds for the planned expansion. Last month, TeleGeography’s CommsUpdate reported that private equity firm CVC and Indonesian internet company First Media raised IDR5.5 trillion (USD455 million) from the sale of share in ISP LinkNet, but admitted they were forced to reduce the number of shares sold due to ‘market turbulence and weak demand’. Having initially set out their stall to sell up to 40% of their combined shares in the ISP, the pair ended up offloading a combined 30% stake priced at IDR6,000 per share – below the initial range of IDR6,200-IDR6,700. CVC sold 473.1 million shares, or a 15.6% stake, while First Media sold 226.7 million shares, or 7.4%. Post-sale, both own 33% of LinkNet each.