BTel agrees restructuring plan

22 Dec 2014

IFR Asia reports that creditors of beleaguered Indonesian CDMA operator Bakrie Telecom (BTel) have formerly approved its restructuring plan, after the telco missed a November 2013 coupon payment on its USD380 million, 11.5% bonds due 2015. However, the journal notes that a group of bondholders were displeased that they were barred from voting. Under the restructuring, creditors owed at least IDR3 billion (USD240,000) will be given 70% of the principal debt, via convertible bonds which will be worth IDR200 per share. The remaining 30% owed – along with smaller obligations to creditors – will be paid in instalments over a period of five and a half years (terms still to be agreed). The plan required approval from two-thirds of debt holders and was approved by 94.6%.

Last week, TelegeoGraphy’s CommsUpdate reported BTel as saying that it plans to take a 6% stake in fellow CDMA wireless service provider Telekom PT SmartFren (Smartfren) as part of their planned network merger deal. In a filing to the local stock exchange, BTel confirmed it will become a minority shareholder in Smartfren post-merger, in response to a query from the bourse. BTel and Smartfren confirmed plans in November this year to merge their respective network operations. While neither side divulged the exact value of the deal, upon completion BTel intends to lease part of Smartfren’s network to serve its own customers. The move came in the wake of BTel’s escalating financial woes: the carrier is being sued by three bondholders in New York for its alleged failure to make two interest payments on the USD380 million bond.

Indonesia, Bakrie Telecom (BTel)