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Telkom aims for Rp 5t from bond issuance next year
State-run telecommunications company PT Telekomunikasi Indonesia (Telkom) says it hopes the market will rebound next year, allowing the company to reap Rp 5 trillion (US$370
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State-run telecommunications company PT Telekomunikasi Indonesia (Telkom) says it hopes the market will rebound next year, allowing the company to reap Rp 5 trillion (US$370.6 million) from a bond issuance.
Telkom finance director Heri Sunaryadi said the company would probably issue bonds of Rp 5 trillion next year in the second round of its planned Rp 12 trillion sustaining bonds offering.
'We'll issue the bonds in the first half of next year if the market picks up,' Heri told reporters on Monday after a meeting of several state companies.
A bond issuance now, he added, would be unwise, as market volatility would inflate bond prices, potentially deterring demand from investors.
Telkom has received approval from the Financial Services Authority (OJK) to issue a total of Rp 12 trillion bonds in a two-year period.
In the first issuance, the state company offered Rp 7 trillion bonds and the bonds were oversubscribed. Telkom used the Rp 7 trillion to part finance infrastructure development and strategic mergers and acquisitions.
However, Heri declined to reveal the intended use of the money reaped from a second issuance.
Telkom would need a huge sum to develop its Indonesia Digital Network (IDN), comprising IDN digital link, IDN access and IDN
convergence.
The company is also now at the forefront of the government's $24 billion drive to expand the country's broadband capacity and widen Internet access over the next four years.
Communications and Information Minister Rudiantara said previously that the government wanted Telkom to lead the broadband plan, hinting that the company would spend more on the project than its peers, including PT Indosat and PT XL Axiata.
As part of the national broadband plan, Telkom is said to be one of the leading candidates to handle the country's Palapa Ring fiber optics connecting each of the country's provinces.
Rudiantara confirmed eight telecommunications vendors and operators had filed proposals to take part in the Palapa Ring project.
The government will, according to Rudi, choose vendors or operators that offer to develop the project at the lowest cost.
Heri refused to comment on the matter, saying that it was still under discussion.
Telkom, which is listed on the Indonesia Stock Exchange (IDX) as TLKM, saw its revenues surge by 12.2 percent to Rp 48.84 trillion in the first half of this year from Rp 43.54 trillion in the same period last year.
The company's net profit, meanwhile, rose by only 2.2 percent year-on-year (yoy) to Rp 7.45 trillion in the Jan.-June period of this year, squeezed by rising operational costs.
The company recorded a 4.9 percent yoy increase in the number of cellular subscribers to 144.06 million users in the first six months of this year, despite the national cellular business generally struggling.
