Tower Bersama Infrastructure, a telecommunication infrastructure provider, says it expects to close its much-anticipated, multi-million tower deal next month.
The Jakarta-based company will finance the purchase of 2,500 telecommunication towers from Indosat, the country’s second-largest mobile phone provider, through a bank loan and the issuance of new shares to Indosat.
“We are hoping to close the transaction in this second quarter, depending on the readiness of each party,” said Hardy Wijaya Liong, vice president director at Tower Bersama. “However, we are working to finish it by May.”
Tower Bersama announced the deal in February of this year.
Its shareholders approved on Wednesday a plan to sell 239.83 million new shares, or 5 percent of the company’s enlarged capital, to Indosat. That would be part of the agreement to pay for Indosat’s towers, said Herman Setya Budi, president director of Tower Bersama.
The shares are priced at Rp 2,757 apiece, which was the 25-day average before the plan was announced on March 22. Based on this price, the new shares are valued at Rp 661.2 billion ($72 million).
The company is also seeking as much as $325 million in bank loans to pay for the tower purchase.
Chief financial officer Helmy Yusman Santoso said there were 11 banks acting as arrangers, including DBS Bank, UOB in Singapore and ANZ Indonesia, for the $250 million loan plus an option to borrow an additional $75 million.
“Looking at the demand received by these arrangers, we can increase [the loan] to $325 million,” Helmy said.
Tower Bersama also announced on Wednesday that it would not pay dividends to its investors this year, because of the acquisition agreement and its other investment plans.
“We have this big acquisition with Indosat, and we are also planning significant organic growth this year,” Herman said. “That will require funds.”
The company declined to disclose an investment plan outside the acquisition of the 2,500 towers, just saying that all investments in tower construction would only be made after the company receives orders from clients.
In the first quarter this year, it spent Rp 281 billion in capital expenditure, according to Helmy. He said Tower Bersama managed to add 678 new tenants in the first quarter but did not disclose the full-year target. He is certain that about 3,000 tenants will come from the 2,500 new towers.
Net income at Tower Bersama rose to Rp 141.8 billion in the first quarter, from Rp 100.4 billion in the same period a year earlier, the company said last week.
Shares of Tower Bersama fell 1.6 percent to Rp 3,025 at the Indonesia Stock Exchange in trading on Wednesday.