XL Axiata to raise USD651m via rights issue to pay off debt to parent group

9 May 2016

Indonesian mobile operator XL Axiata has received the go-ahead from the country’s Financial Services Authority (Otoritas Jasa Keuangan, OJK) to raise IDR8.7 trillion (USD651.4 million) via a rights issue, of which some USD500 million will be used to pay off debt to its parent, Malaysia-based Axiata Group. It is understood that XL Axiata intends to issue 2.75 million new shares – with a stipulation that anyone already holding 100 shares will be given pre-emptive rights to purchase 25 new shares – with the price per share set at IDR3,150. In a press statement, the cellco’s CFO Mohamed Adlan confirmed: ‘This rights issue is an important achievement … under which XL Axiata will be able to repay debt liabilities amounting to USD500 million to our parent company.’ Adlan adds that the Malaysian firm, which currently holds a 66.4% stake in XL, has announced its commitment to execute its rights to purchase new shares.

XL Axiata reported a 2% year-on-year increase in turnover for the three months ending 31 March 2016, to IDR5.636 trillion, as earnings before interest, tax, depreciation and amortisation (EBITDA) surged 17% to IDR2.191 trillion, resulting in an EBITDA margin of 39% (up five percentage points). Net income (per share) for 1Q16 stood at IDR20 billion, reversing a net loss of IDR89 billion in the corresponding period a year before, which it said was positively impacted by the strengthening of the Rupiah against the US dollar. CAPEX of IDR1.1 trillion reflected, it said, ‘efforts to expand its data infrastructure and mobile services’ via internally generated funds. The carrier’s president and CEO, Dian Siswarini, said: ‘We have made a promising start to 2016 with further improvements in our operating and financial performance and we hope to build momentum as we execute on our Transformation Agenda.’

Indonesia, Axiata, XL Axiata