PT Indosat Tbk (ISAT) is planning to sell and rent back 2500 tower, or about 25 percent of Indosat's tower assets with an estimated total sales value of U.S. $ 519 million.
In this transaction, in cooperation with PT Indosat Tower Joint Infrastructure Limited (TBIG) and its subsidiary PT Indonesia solution Towers. While the sales value of U.S. $ 519 million will be divided into an upfront payment of U.S. $ 406 million and the maximum potential deferred payment of U.S. $ 113 million.
Upfront payment will consist of cash and new shares issued TBIG. Shares will be issued at a price based on trailing market price at the time interval prior to closing the sale process, and is estimated to represent about 5 percent of the total share capital of the issuance of new shares TBIG this.
"We are delighted to have signed this agreement in which this agreement allows us to monetize some of our non-core assets with compelling value," said Indosat President Director and CEO Harry Sasongko in a written statement received , Wednesday, February 8, 2012.
Under the terms of sale, the company will lease tower sold for a minimum period of 10 years based on market prices. With the transfer of ownership of these towers, the company will enjoy significant savings in terms of expenditures for capital expenditure and operating assets of the tower.
"The transaction proceeds will be used for debt repayment, investment capital and general corporate purposes," he said.
In addition, Indosat has completed the terms of preference to the Joint Tower in line with the position of Indosat as an anchor tenant (main tenant). This is a significant added value for Indosat gained from the transaction as a result of the realization of savings over the term of the lease.
"This sale provides investment yields tangible results at the same time unlock the value of some of our tower business and free up capital to be reinvested into the core business," said Harry.
He explained this transaction is part of Indosat's strategy to provide value or increase the productivity of non-core assets. Indosat believes that an independent tower company can provide a better return on assets compared with the tower operators.
"Their focus on the business of the tower and the ability to add collocation. Transaction is expected to open up the possibility for Indosat to increasingly focus on core services and optimize wireless operations and costs,"
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