JAKARTA (TheInsiderStories) – Telco operator, PT Indosat Tbk (IDX: ISAT) announced that it has paid off part of the debt worth of Rp301 billion (US$21.32 million), said the management on Monday (14/12). The bond has been issued in 2015.
For years, the cellular provider facing the debt problems. Based on the company’ data total debt of the issuer around Rp49.15 trillion. As a result, their credit risk, which is assessed through the debt-to-equity ratio (DER), increased from 4.02 times to 4.51 times.
On Oct. 15, Indosat, had entered into a sale and purchase agreement to sell and lease back 3,100 of its towers, 36 percent of its total towers, for Rp6.4 trillion to fund the provider programs. PT Dayamitra Telekomunikasi (Mitratel) bought 2,100 towers for Rp4.4 trillion and, PT Profesional Telekomunikasi Indonesia acquired 1,000 towers for Rp1.95 trillion.
Its expecting, the proceeds will materially increase the operator’ cash balance and help support its aggressive capital spending plans over the next 12 months. In addition, the sale reflects their commitment to managing its debt levels through the sale of non-core assets.
Indosat has significantly increased its capital expenditure plans to Rp30 trillion for 2019 – 2021, to catch up with peers on 4G network and coverage outside of Java. While the accelerated investment is key to the unit of Qatar’ Ooredoo QSC strategy to remain competitive, it has resulted in the company’ credit metrics weakening amid an intensely competitive operating environment for the Indonesian mobile sector.
In terms of performance, the operator recorded a net loss of Rp436.15 billion in the first nine months of 2020, increased by 60.75 percent from the same period of last year, Rp284.59 billion. But, the revenue rose 8.44 percent to Rp20.59 trillion from Rp18.85 trillion previously.
The cellular contributed Rp17.03 trillion, multimedia, data communication, internet and fixed telecommunication revenues of Rp3.16 trillion and Rp. 395.50 billion, respectively. At the end of September, president director and CEO of Indosat, Ahmad Abdulaziz Al-Neama, reported the cellular subscribers reached 60.4 million at the end of September 2020, an increase of 2.8 percent over the previous year.
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