M

obile phone operator PT Bakrie Telecom (BTEL) said the company had undergone major corporate restructuring but declined to comment if such policies could heal its financial wounds.

Anindya Bakrie, president commissioner of BTEL, said the restructuring was conducted in 2012 and described it as a challenging year.

'This massive restructuring work has shown results in the first quarter of the year,' he said after a general shareholder's meeting on Tuesday.

Anindya said the restructuring had decreased net loss to Rp 97.4 billion (US$9.91 million) in the first quarter of 2013, nearly one-fourth of the Rp 355.6 billion loss in the same quarter of the previous year.

He further said the operator's financial, operational and organizational structure had been altered as a result of the process.

According to Anindya, the operator 'revitalized' their financial structure through the payment of bonds worth Rp 650 billion due last year.

The operator paid 38.4 percent of bonds through a rights issue, a report filed by the operator at the bourse in September 2012 showed. The report also mentioned the operator secured a Rp 400 billion syndicated loan from Credit Suisse to cover the remainder.

The operator still has liabilities totaling Rp 7.3 trillion, as indicated in their first quarter financial report.

In May, Standard & Poor's lowered the ratings of BTEL's long-term corporate credit to CCC from B- with a negative outlook because of 'significant liquidity pressure over the next 12 months'.

The rating agency also mentioned that BTEL had yet to reveal plans to 'bridge a funding gap of about US$100 million over the next 12 months'.

Standard and Poor's further noted that the 'funding gap is on account of a $50 million bank loan, of which about $5 million is due in June, September and December 2013'.

Yet, Anindya said that the operator has 'never failed to pay both principal and interest'.

According to him, the operator recently covered interest payment ' worth roughly $22 million and due every six months ' with internal cash.

The interest stems from the guaranteed senior notes worth $250 million issued by the operator's subsidiary, Bakrie Telecom Pte. Ltd. The subsidiary's notes, which are listed on the Singapore Exchange Securities Trading, is due in 2015.

'Our earnings before interest, tax, depreciation and amortization [EBITDA] touched approximately Rp 1 trillion, and that value is more than enough to cover the $22 million,' Anindya said.

Aside from financial restructuring, the company also began to co-utilize resources, including manpower, telecommunication tower and billing systems, with PT Sampoerna Telekomunikasi Indonesia (STI), he said.

'This has enabled us to reduce operating expenses by about 35 percent,' he added.

He declined to confirm if the reduction of expenses could be maintained throughout the year and heal their financial records.

Anindya added that the operator has recently recruited Eka Anwar into the operator's board of directors.

Eka previously served in key marketing positions in Research In Motion (RIM) Indonesia, Samsung
Indonesia and Nokia Indonesia.

'With all these elements in place, we feel ready to move forward,' he said.