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Bakrie Telecom sells towers to up investment
Shareholders of PT Bakrie Telecom, which operates the CDMA brand Esia, have given the all clear for the company's plan to sell 543 telecommunication towers, to be used partly to help finance its expansion for next year
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Shareholders of PT Bakrie Telecom, which operates the CDMA brand Esia, have given the all clear for the company's plan to sell 543 telecommunication towers, to be used partly to help finance its expansion for next year.
"We hope to gain Rp 380.22 billion (US$34 million) from the sale," president director Anindya Bakrie said after a shareholder meeting Tuesday.
Six tower providers -- Solusi Tunas Pratama, Tower Bersama, Protelindo, Retower, Padi Mekatel and Powertel -- have indicated their interest in the offer, Anindya said.
Anindya said the towers were being sold to boost the company's operational efficiency and to achieve its target of $200 million in capital expenditure for next year.
Bakrie Telecom has said it plans to spend $600 million in capital expenditure between 2008 and 2010.
By the end of this year, the company will have spent $238 million for capital expenditure, partly coming from the Rp 3 trillion it secured from a rights issue earlier this year.
"Aside from the $34 million from the towers, we plan to finance next year's capital expenditure from the unused proceeds of the rights issue, internal cash and a $50 million vendor financing deal," Anindya said.
A vendor financing scheme is a form of loan given by a company which the recipient must use to purchase goods produced by the lender -- which in this case is PT Huawei Tech Investment, the local unit of the Chinese telecommunications giant Huawei Technologies.
The partnership involves Bakrie Telecom purchasing Huawei's cellphones and bundling them with Bakrie Telecom's Esia chips.
As of the end of the third quarter of 2008, Bakrie Telecom had posted a net profit of some Rp 1.5 trillion, from Rp 849 billion last year. This 6.9 percent profit growth was supported by it almost doubling its customers, who currently number around 6.5 million.
It also plans to buy 7.2 percent of its shares in the market, putting aside some Rp 600 billion for the buyback scheme.
"We have bought back 2.4 percent of our shares so far, and we are hoping to reach the 7.2 percent target next year," Anindya said.
Many phone operators here are selling their towers, choosing instead to lease them, following a government regulation requiring each telecommunication tower to be shared by more than one operator.
Bakrie Telecom said that after the sale of the 543 towers it would still have around 150 towers. (JP/dis)
