The countryâs tower operators are starting to refinance their debts to avoid ballooning debt interest and improve financial ability for expansion, in turn enhancing their business performance
he country's tower operators are starting to refinance their debts to avoid ballooning debt interest and improve financial ability for expansion, in turn enhancing their business performance.
Publicly listed operators PT Tower Bersama Group (TBIG), PT Sarana Menara Nusantara (TOWR) and PT Solusi Tunas Pratama (SUPR) are among the three companies carrying out the action.
TBIG announced Tuesday that it had secured US$1.3 billion in new loans to refinance its debts.
The new loans consist of $1 billion unsecured term revolving credit facilities and an additional $300 million unsecured term credit facility.
'We have been able to successfully refinance our existing bank facilities at competitive rates on an unsecured basis,' said TBIG CEO Hardi Wijaya Liong in a statement.
Among banks participating in the new loan facilities for TBIG are Australia and New Zealand Banking Group (ANZ), Bank of Tokyo Mitsubishi UFJ, BNP Paribas, CIMB Bank Berhad and CTBC Bank Co. Ltd.
As of September this year, TBIG's total short-term liabilities hit Rp 7.6 trillion ($625.2 million), with total liabilities standing at Rp 16.9 trillion. The firm's total equity, meanwhile, reached Rp 4.4 trillion.
TBIG finance director Helmi Yusman Santoso said that his firm would use $900 million of the new loans to refinance its $2 billion syndicated loan, while the remaining $400 million would be used for capital expenditure (capex) next year.
The $2 billion syndicated loan will mature in three years and bear an annual interest margin of 2.5 percent above the Jakarta Interbank Offered Rate (JIBOR).
The new loans, meanwhile, will mature between one and five years with interest margin between London Interbank Offered Rate (LIBOR)+1.5 percent and LIBOR+2 percent per annum.
Another listed tower firm, TOWR, announced on Monday that it would issue SGD$180 million ($144 million) through its subsidiary, PT Profesional Telekomunikasi Indonesia (Protelindo) Finance BV.
The bonds will have a coupon rate of 3.25 percent per annum and the bonds due on Nov. 27, 2024.
Proceeds from the bond issuance will be used to refinance US dollar ' and Euro-dominated debts of TOWR's subsidiaries ' Protelindo and Protelindo Finance.
According to analysis from Truscel Capital, TOWR's bond issuance is a way to help the firm maintain the effectiveness of its capital structure.
'The firm is trying to find loans that offer long maturity, but also offer relatively low-interest margin,' the analysis said.
Trustcel Capital estimated that TOWR's total liabilities would decrease to Rp 5.7 trillion in 2024 from Rp 12.7 trillion in the first quarter of this year.
SUPR, meanwhile, plans to raise Rp 2.6 trillion from a rights issue to refinance debts and boost its working capital. The firm also plans to raise another $650 million from global bonds.
Woori Korindo Securities Indonesia research head Reza Priyambada said that the corporate actions taken by the tower companies would reduce the companies' exposure to loans with high-interest margins.
'It could also help the companies prepare for other corporate actions to avoid possible debt-interest rate increases next year,' he said.
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