Huawei to take 9% Bakrie Telecom stake?

29 Apr 2016

Huawei Technologies of China is to take a stake in struggling Indonesian telco Bakrie Telecom (BTel) via a bond conversion estimated to be worth IDR1.23 trillion (USD93.2 million), or roughly 9% of BTel’s shares. According to DealStreetAsia, as part of a wider plan to pay off debts of IDR11 trillion to its creditors, BTel has secured shareholder approval to raise IDR7 trillion through convertible bonds – equivalent to 56% of the operator’s stock – that will then be divided up between its 50 or so creditors on a proportional basis. With the conversion price reportedly set at IDR200 per share (or four times its current trading price), its three major creditors will receive equity as follows: Huawei (9%, worth IDR1.23 trillion), PT Profesional Telekomunikasi Indonesia (Protelindo) will take 7% (IDR969 billion), and PT Solusi Tunas Pratama (SUPR) will take 6.8% (IDR935 billion). Meanwhile, the public’s shares will be diluted to 30% from 67% post-transaction. The loss-making CDMA service provider has failed to report a profit in over five years’ trading.

Indonesia, Bakrie Telecom (BTel), Huawei Technologies