T

he infrastructure unit of private equity firm Saratoga Group has raised Rp 1.08 trillion (US$118 million) from the sale of its shares in independent tower operator PT Tower Bersama Infrastructure Tbk (TBIG) through a private placement mechanism.

PT Saratoga Infrastruktur released the 373.17 million shares it owned in Tower Bersama at Rp 2,900 each on March 22, when the shares were traded at Rp 3,000 apiece.

Saratoga Group is co-founded by prominent entrepreneurs Sandiaga Uno and Edwin Soeryadjaya.

The shares were equivalent to 8.19 percent ownership in Tower Bersama, according to The Jakarta Post’s calculation based on the company’s 2011 shareholders composition.

“The number of investors who bought the shares amounted to 15 to 20 foreign and domestic investors, most of were institutions like pension funds,” Tower Bersama president director Herman Setya Budi told the Post in a telephone interview.

“We only offloaded a 20 percent stake during an initial public offering [IPO] while demands were a lot more, so investors complained. They found it difficult to buy in the [secondary] market because there was no one selling,” he said.

The shares sale was aimed at boosting Tower Bersama’s liquidity in the market, according to Herman.

Tower Bersama, which has over a Rp 13 trillion market value, has seen its shares soar to almost 50 percent since the IPO and to about 25 percent so far this year, boosted by strong financial performance. Revenues and net profits each jumped 45 percent last year to Rp 492.35 billion and Rp 970.03 billion respectively.

The company is also expected to be Indonesia’s largest independent tower operator by towers owned, overtaking PT Sarana Menara Nusantara Tbk (TOWR), after a $159 million deal to buy 2,500 telecommunication towers owned by PT Indosat Tbk (ISAT).

Prior to the deal, Tower Bersama owned and operated 4,868 telecommunication sites as per December 2011, serving 7,002 tenants.

Afterwards, Indonesia’s four largest telecommunication firms will contribute more than 70 percent of Tower Bersama’s total revenue and Indosat will account for more than 25 percent of revenue following the deal, according to Fitch Ratings in its note affirming Tower Bersama’s BB credit rating.

“After the acquisition, the company’s average contract length will be 7.7 years, representing $1.5 billion of locked-in revenue,” Fitch said in the report.

Indonesia, Southeast Asia’s largest economy, has seen a telecommunication boom in recent years with the penetration rate nearing 100 percent of almost all of its 237 million population, requiring more towers in operation.

Herman expected to maintain the company’s performance following the share sale given that the majority shareholder of Tower Bersama will remain Saratoga Infrastruktur. ”There should be no major problem post-transaction,” he said.

Prior to the transaction, Saratoga Infrastruktur owned a 25.83 percent stake in Tower Bersama, the most after PT Provident Capital Indonesia (25.11 percent) and PT Wahana Anugerah Sejahtera (25.11 percent).