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elecommunications tower operator PT Tower Bersama Infrastructure (TBIG) is readying almost US$1.8 billion to acquire a number of towers owned by one of the nation'€™s top telecommunications operators, PT XL Axiata.

Tower Bersama finance director Helmi Yusan Santoso said that his firm had pocketed $1 billion in loans and had the green light from shareholders and the Financial Services Authority (OJK) to issue bonds and sustained bonds worth $500 million and Rp 3.25 trillion ($277.3 million), respectively.

He said that Tower Bersama would issue the Rp 3.25 trillion-sustained bonds in the third or fourth quarter this year.

'€œThe combination will facilitate the acquisition of XL'€™s towers,'€ he added.

TBIG will buy XL'€™s towers through open bidding, however, Helmi did not elaborate on how many of XL'€™s 8,000 towers would be on offer or their value.

'€œWe don'€™t know the details of the offer yet. We have signed a non-disclosure agreement with XL, but we haven'€™t received the terms of reference [ToR],'€ he said.

XL will use the funds raised from the tower sales to pay off part of the firm'€™s $865 million debt, which was used to acquire PT Axis Telekom Indonesia in March.

Tower Bersama will look at the towers'€™ tenants, revenue and leasing period in determining its bidding price, rather than just the towers'€™ physical condition, according to Helmi.

He believes that the acquisition will be profitable as it would be in the form of sales and lease back, in which case XL would rent the towers after selling.

Tower Bersama, however, remains open to the possibility that the bidding could be canceled if the expected price by XL was not in line with the towers'€™ profitability, Helmi explained.

'€œWe will take part in any acquisition opportunity, but we need to make sure that it is profitable,'€
he said, adding that organic growth was one of his company'€™s main focuses.

Tower Bersama currently has more than 9,000 telecommunications towers and over 17,000 tenants as of March this year, with more expected.

The company targets between 3,000 and 3,300 additional tenants by year-end.

One telecommunications tower normally costs around Rp 1 billion to Rp 1.1 billion to build, while the cost to acquire such a tower is usually higher.

'€œWhen we bought Indosat'€™s towers in 2012, we spent around $165,000 on each tower, more than if we had built the towers ourselves,'€ he said.

Helmi said that the cellular operator would likely choose a bidder based on their proven track record, not just on the highest bidding price.

To date, there are four publicly listed companies, including Tower Bersama, that are interested in XL towers.

The other three companies are PT Sarana Menara Nusantara (TOWR), PT Solusi Tunas Pratama (SUPR) and PT Inti Bangun Sejahtera.

Shares in Tower Bersama were up 0.96 percent on Wednesday, closing at Rp 7,875 apiece. The stock has jumped 35 percent this year, outperforming the broader benchmark Jakarta Composite Index'€™s (JCI) nearly 20 percent gain.