JAKARTA (TheInsiderStories) – Indonesia publicly listed’s PT Tower Bersama Infrastructure Tbk (IDX: TBIG) announces that it has closed its continuous Rupiah Bond worth of Rp608 billion (US$45.52 million) on Thursday (06/07).

The July 2021’s IDR Notes set a fixed interest rate of 8.50 percent for a tenor of three years and will have quarterly coupon payments. The local bond will constitute senior unsecured obligations of TBIG.
The use of net proceeds will be to partially repay the company’s existing financial liabilities, especially Facility B of the company’s credit facilities. The notes obtained a local AA- rating from Fitch Indonesia and will be listed on the Indonesian Stock Exchange on July 6, 2018.

Total gross debt of Tower Bersama as of March 31, 2018, valuing U.S dollar loans at the hedged exchange rate, was Rp18.08 trillion and gross senior debt was Rp12.13 trillion while cash balances were Rp926 billion, resulting in net debt of Rp17.16 trillion and net senior debt of Rp11.21 trillion.

Using the first quarter 2018 annualized EBITDA, the net senior debt to EBITDA ratio is 3.1x, and net debt to EBITDA ratio is 4.8x.

“Our current leverage is well within our bond covenants of not more than 6.25x for gross debt (at the hedged rate of debt) over last quarter annualized EBITDA,” commented Helmy Yusman Santoso, CFO of TBIG in a press statement on Thursday.

Hardi Wijaya Liong, CEO of TBIG added, the company maintain its prudent hedging strategy by using life-of-debt derivative hedging instruments, with further protection from $40 million per year of long term contracted U.S dollar revenue.

During the three months of 2018, TBIG generated revenue and EBITDA amounting to Rp1.04 trillion and Rp895.5 billion, respectively. Using the first quarter 2018 results on an annualized basis, revenue and EBITDA reached Rp4.15 trillion and Rp3.58 trillion, respectively.

As of March 31, TBIG had 23,661 tenants and 13,557 telecommunication sites. The company’s telecommunication sites comprised 13,500 telecommunication towers and 57 DAS networks. With total tower tenants amounting to 23,604 on tower sites, the company’s tenancy ratio is 1.75.

Hardi added, “We are comfortable with our guidance of 2,500 tenant growth for the full year 2018.”

Tower Bersama is a provider of telecommunications infrastructure for the placement of BTS by telecommunications operators in Indonesia. TBIG is publicly listed on the Indonesian Stock Exchange and is majority owned by Saratoga Group and Provident Capital.

The swift conclusion of Indonesia’s 2100MHz and 2300MHz spectrum auctions is likely to provide greater clarity for both the telecommunications and tower sectors, says Fitch Ratings.

The removal of the uncertainty which had surrounded the spectrum auctions means that mobile operators will now be intensifying 4G network expansion rather than just pursuing upgrades of existing network infrastructure.

However, operators would first need to re-farming their 2100MHz spectrum to enable contiguous spectrum allocations for more efficient use of spectrum resources.

Fitch expect the 2100MHz and 2300MHz frequencies to be deployed for 4G services as operators strive to increase network capacity in areas of high population density, while the lower frequencies may eventually be re-assigned to improve coverage outside the Java region.

“We expect independent tower companies PT Tower Bersama Infrastructure (TBIG, BB-/Stable) and PT Profesional Telekomunikasi Indonesia (Protelindo, BBB-/Stable) to benefit from any accelerated capex expansion by their largest tower tenants – Telkomsel and Hutch, respectively,” Fitch said.

Writting by Staff Writer, Email: theinsiderstories@gmail.com