Leading pay TV company PT MNC Sky Vision is considering executing an option to redeem senior notes amounting to US$165 million issued by its subsidiary.
MNC Sky Vision, which is traded on the Indonesia Stock Exchange under code MSKY, informed the bourse on Thursday that it aimed to hold an extraordinary general meeting, along with an annual meeting, on April 29, to seek approval from shareholders on a plan to refinance its debt.
MSKY finance director Effendi Budiman said the refinance plan referred to senior secured guaranteed notes totalling $165 million from the company’s wholly owned subsidiary, Aerospace Satellite Corporation Holding BV (ASCH).
“We will propose the refinance plan. It depends on the market condition. If through refinancing we can attain lower [interest] rates than the current notes, we will follow through with it,” Effendi said over the telephone on Thursday.
According to its financial report as of the end of September 2012, ASCH issued the senior notes on Nov. 16, 2010. The notes have a fixed interest rate of 12.75 percent per annum payable every six months.
The notes, listed on the Singapore Exchange Securities Trading Limited, will be due on Nov. 16, 2015. However, ASCH has the option to redeem the notes entirely by Nov. 16 this year.
Funds raised from the notes issuance were used to purchase a satellite transponder, repay loans to a number of parties as well as support capital expenditure and general corporate purposes. The notes were ranked “B” by Standard and Poor’s Rating Services and “B2” by Moody’s Investor Services Inc.
“We still don’t know how to support the refinance, whether it will be through a new bond issuance or loans from banks and whether it will be in US dollars or rupiah. We are exploring all alternatives,” Efendi said.
MSKY’s recently released unaudited financial report showed that the company had suffered from declining unrealized foreign exchange losses of Rp 165 billion from the senior notes. The losses contributed to the company’s 34 percent drop in net profits to Rp 43 billion last year from Rp 65 billion in 2011.
MSKY’s unaudited 2012 financial report showed that it booked Rp 2.4 trillion in revenue last year, an increase of 37 percent from Rp 1.7 trillion in 2011.
The main driver of the revenue growth was the company’s growing number of subscribers, which rose to 1.72 million at the end of last year, a 48 percent increase from 1.16 million in 2011.
Effendi said that MSKY targeted to attract 600,000 new subscribers this year, pushing the total number of clients to around 2.3 million.
As the number of subscribers is expected to grow, MSKY, according to Effendi, is targeting Rp 3.2 trillion in revenues this year, which will be around a 39 percent surge from its 2012 unaudited revenue report.
MSKY currently has three pay TV brands, which are Indovision, Top TV and Okevision, with a total of 116 international channels.
MSKY has set aside Rp 1 trillion in capital expenditure to support its business growth this year. The company will use funds from the initial public offering (IPO) last year, loans from local banks and internal cash to support the expenditure.
Shares in MSKY closed at Rp 2,375 apiece on Thursday, a 1.04 percent increase from a day earlier.
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