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ublicly listed tower company PT Tower Bersama Infrastructure has signed a corporate guarantee and indemnity agreement with the Australia and New Zealand Banking Group Limited (ANZ) for a hedging facility worth around US$975 million, showing its commitment to mitigate the effects of exchange rate volatility.

Tower Bersama stated in a recent disclosure submitted to the Indonesia Stock Exchange (IDX) that it had signed the agreement with the ANZ Group that became the hedge counterparty for a major part of the tower company'€™s US-dollar loans.

The publicly listed firm signed facility agreements of $1 billion and $300 million in Nov. 21 last year, with $350 million of the $1 billion facility not being utilized yet.

The loan facilities are being channeled to the firm'€™s subsidiaries, namely PT Triaka Bersama, PT Metric Solusi Integrasi, PT Telenet Internusa, PT United Towerindo, PT Tower Bersama, PT Tower One, PT Batavia Towerindo, PT Prima Media Selaras, PT Bali Telekom, PT Solusindo Kreasi Pratama, PT Mitrayasa Sarana Informasi, PT Solusi Menara Indonesia and PT Bersama Terpadu.

'€œAs a follow-up on the two [facility] agreements, the subsidiary group [recipients of loan facilities] signed a corporate guarantee and indemnity agreement with the ANZ Group on June 5,'€ Tower Bersama finance director Helmy Yusman Santoso said.

Under the guarantee and indemnity agreement, the subsidiary group guarantees to pay compensation to the ANZ Group if one of the subsidiaries fails to meet its obligations as stated in the agreement.

The agreement also states that if the subsidiary group fails to meet each claim it has to pay to the hedge counterparty, it has to pay the hedging premium and some additional interest.

Tower Bersama, through its subsidiary PT Solu Sindo Kreasi Pratama, had previously signed a hedging commitment with the ANZ Group for a period of 57 months with payments for the hedging premiums to be made quarterly. The hedging facility is intended for 75 percent of its two facility agreements worth $1.3 billion.

Tower Bersama, which saw its net profits slump by 39.3 percent in the first quarter of this year, has been gradually hedging its US dollar-denominated debts to mitigate the effects of fluctuations in interest rates and exchange rates.

Helmy said that his firm was also hedging around 80 percent of its $350 million worth of bonds, which were listed on the Singapore Stock Exchange and issued in February.

Tower Bersama'€™s total liabilities hit Rp 18.76 trillion ($1.4 billion) as of the first quarter of this year, while its total equity stood at Rp 3.87 trillion.

The firm, which is listed on the bourse under the code TBIG, is also committed to reducing its US dollar debts to further decrease interest rates.

The firm secured an approval from a shareholders meeting last month to issue $500 million in global bonds, which are set to be used to refinance debts and/or cover future capital expenditures.

Tower Bersama booked a 5.9 percent increase in its revenues to Rp 827.34 billion in the first quarter of this year from Rp 781.23 billion in the same period last year.

The firm'€™s growing revenues were, however, squeezed by rising expenses '€” including a 32.3 percent surge in financial expenses that hit Rp 318.6 billion, resulting in a 39.3 percent year-on-year (yoy) net profits slump to Rp 319.8 billion.

Tower Bersama had a total of 10,868 telecommunications towers and 17,831 tenants as of the end of March this year.

The firm'€™s shares shot up by 1.98 percent to Rp 9,025 apiece on Thursday'€™s close from Rp 8,850 apiece in the previous closing.