Telkom secures US$129 million loan<\/p>\n
Leony Aurora, The Jakarta Post, Jakarta<\/p>\n
PT Telekomunikasi Indonesia (Telkom) signed on Thursday a US$129
\nmillion loan agreement with ABN Amro to repurchase the former's
\npromissory notes.<\/p>\n
Telkom issued the promissory notes in 2002 to help finance the
\nacquisition of PT Pramindo Ikat Nusantara (Pramindo), the
\ncompany's former partner in developing fixed-line telecom
\nservices in the Sumatra region.<\/p>\n
Woeryanto Soeradji, Telkom's corporate secretary, announced
\nthat the loan and interest would be repaid in 10 monthly
\ninstallments, starting on March 31 and ending on Dec. 30, 2004.<\/p>\n
The funds would be placed in an escrow account on Jan. 30 and
\nused to exercise the call option (of the promissory notes) on
\nMarch 15. This move would save interest costs as the loan carries
\na lower interest rate than the promissory notes.<\/p>\n
Telkom and Pramindo's shareholders signed a sale and purchase
\ndeal totaling $425 million in mid-2002, which is to be paid in
\ninstallments over 2.5 years.<\/p>\n
In 1995, Telkom inked agreements with five companies as joint
\noperation scheme partners to construct and operate fixed
\ntelephone lines in various provinces in Indonesia.<\/p>\n
Under the 15-year contracts, a partner was required to install
\nnew telephone lines and pay Telkom a license fee, a minimum
\nmonthly fee, as well as a specified share of its profits.<\/p>\n
When the 1997 financial crisis hit Asia and the dollar soared,
\nthe partners complained that their revenues were barely enough to
\ncover their investments.<\/p>\n
They also lost interest in continuing their partnership
\narrangements following the enactment of the Telecommunications
\nLaw in 2001, which stipulates that Telkom will lose its monopoly
\nin 2003.<\/p>\n
Telkom has bought out four of the partners and recently took
\nover the rights to build and operate new fixed lines for the
\nprovinces of Yogyakarta and Central Java from PT Mitra Global
\nTelekomunikasi Indonesia (MGTI), the last of its partners.<\/p>\n
The giant company will have to make monthly payments to MGTI
\nof between US$5.4 million and $6.8 million for these rights until
\nthe expiry of the contract in 2010.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/telkom-secures-us129-million-loan-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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