P

T XL Axiata has secured a US$500 million loan facility from Malaysian parent, Axiata Group Berhad, to cover the acquisition of PT Axis Telekom Indonesia.

In a document sent to the stock exchange, XL said that the loan carried interest of 2.41 percent per annum, and was payable three years after the first draw-down of the loan facility.

'€œThe $500 million loan will cover part of the $865 million payment liable to Axis,'€ XL Axiata CEO,
Hasnul Suhaimi, told The Jakarta Post.

Axis is valued at $865 million on a cash-free and debt-free basis, as outlined in the conditional sales purchase agreement (CSPA) between XL Axiata and Saudi Telecom Company (STC) as well as the latter'€™s subsidiary, Teleglobal Investments BV.

Teleglobal initially held an 80.1 percent stake in Axis, along with Althem BV with a 14.9 percent stake and PT Hamersha Investindo with its 5 percent ownership.

After the acquisition is finalized, XL will own 95 percent of Axis, while PT Pesona Nuansa Abadi will control the remaining 5 percent.

Hasnul added that Axis would then utilize the $500 million payment to pay off the company'€™s debts to various creditors.

'€œAxis will use the funds to meet their responsibilities toward creditors,'€ he said.

XL had previously said that Axis had liabilities amounting to around Rp 21.7 trillion ($1.89 billion) as of September 2013.

XL has also stated that it will only pay $100 for Teleglobal'€™s 95 percent share, while the remainder of the $865 million will go toward paying off creditors, notably PT Huawei Tech Investment and banks providing murabaha (a form of Islamic financing) credit facilities.

These banks include China Development Corporation, Kuwait International Bank and Deutsche Bank AG.

Hasnul said the balance of the purchase price, $365 million, would come from bank loans.

'€œWe have secured commitments from various banks to provide us the required loans,'€ he said.

'€œWe will release more details once we have fully closed the transactions,'€ he added.

As of December 2013, XL booked liabilities worth nearly Rp 25 trillion, a sum 24 percent higher compared to the previous year. Total equity touched Rp 15.3 trillion, relatively unchanged from the year before.

Overall, liabilities and equity increased by 14 percent to Rp 40.2 trillion for the year 2013.

Meanwhile, profits for the year fell by 63 percent year-on-year to Rp 1 trillion, partly due to a 247 percent rise in foreign exchange losses to Rp 1 trillion.

Meanwhile, Hasnul said that with the loan in hand and with permits from the Business Competition Supervisory Commission (KPPU), the mobile operator only had '€œadministration issues left'€ to finalize the acquisition of Axis.

XL announced on Monday that the KPPU had given the green light for the acquisition to go ahead. The KPPU'€™s nod was the last in the series of permits XL had to obtain as required by the CSPA.

'€œWe will now be completing the necessary documents,'€ he said.

Axiata Group, Malaysia'€™s biggest mobile phone operator by market value, said recently that its fourth-quarter net profits last year were almost flat as revenues just about offset higher costs and foreign exchange losses from its Indonesian operations.

Net profits stood at 575.6 million ringgit ($175.46 million) in the quarter ended Dec. 31, up 0.8 percent from 571.1 million ringgit a year earlier, Axiata told the stock exchange on Thursday.

Net profits for 2013 rose 1.6 percent to 2.55 billion ringgit from 2012.