JAKARTA (TheInsiderStories) – Amid the debt problems that surround the company, PT Bakrie Telecom Tbk (IDX: BTEL) plans to conduct a complete business transformation as a retail telecommunications service provider to TMT Infrastructure Provider, the company said in a public presentation on August 24.
The company currently in the process to restructure its debt with total amount Rp11 trillion (US$758.62 million) from 580 creditors. The debt restructuring is carried out through a stock conversion scheme. Of the total debt, as much as 70 percent would be converted into shares.
At present, said President Director of BTEL Robertus Bismarka on June 24, the unit of Bakrie Group has been restructured is the debt to their biggest creditor Huawei Technologies Co., Ltd., a Chinese multinational networking, telecommunications equipment, and services company.
Huwaei became one of BTEL’s shareholders after the conversion of Mandatory Convertible Bonds worth Rp 1.24 trillion to 6.189 billion shares. Now, Huwaei hold 16.83 percent of BTEL.
At the beginning of this year, BTEL registered a Delaying Debt Payment Obligations as a settlement for creditors in the United States. BTEL has issued convertible bonds with an emission value of $380 million in 2011. The hope is that this process can be completed before end of 2018.
Furthermore, in the fourth quarter of 2018 and the first quarter of 2019, BTEL will process the exchanger offer process of convertible bonds with a new debt consisting of shares and cash portions.
Bismarka explained, this jumbo debt was the last legacy of the previous BTEL as a telecommunication company. If the debt restructuring process is completed and all convertible bonds have been converted, the founding shareholders Bakrie Group will be delineated to 32 percent.
Based on the company presentation, since 2017, BTEL has been operating in the field of telecommunications solution services for corporate customers. Furthermore, is said, the company intends to develop the potential for managing digital broadcasting system infrastructure.
Along with the transformation of the Analog to Digital Television Broadcasting System, BTEL has entered into an agreement with one of the private television stations of the multiplexer owner to become the main provider of infrastructure and digital broadcast technology management services.
The television market in Indonesia currently supports digital transitions, with 80 percent of devices ready to accommodate digital broadcasts. BTEL said, will provide managed service services for Digital TV broadcasting needs, both for media within the Bakrie Group and other TV stations
Graduallym the television market in Indonesia moves to new technology, of which a total of 116 million television populations, 81 percent (around 94 million units) are flat screens with the ability to receive better quality broadcasts. While, the remaining 19 percent (around 22 million units) are still in the form of tube television which are very likely to be replaced in the future.
Of Rp2.5 trillion estimated total investment for the construction of digital infrastructure that must be issued by media companies that own multiplexers.
Bakrie Telecom established on August 13, 1993 and has been listing at the Indonesia Stock Exchange on Feb. 3, 2006. Beside Huawei, the other shareholders of BTEL are Mahindo Agung Sentosa 13.60 percent, Bakrie Global Ventura 7.18 percent and public 56.38 percent.