Publicly listed cellular phone operator PT Excelcomindo Pratama (XL), the country’s third largest telcom company, has cancelled plans to sell 7,000 telecommunications towers and will instead turn to a rights issue to raise funds.
The company decided to cancel the sale of the towers due to the unsatisfactory bidding prices offered by interested companies, it said in a filing to the Indonesia Stock Exchange (IDX) on Wednesday.
The potential buyers could not meet the price set by the company, around US$90,737 to $ 115,408 per tower, as the ongoing tight liquidity at global and local level makes it difficult to secure financing.
XL Corporate Secretary Ike Andriani said;” The cancellation decision was taken after the offered prices did not reach the expected levels because it’s hard for potential investors to obtain financing under the current circumstances.”
The company started the tenders for the towers in early 2008. Until the end of the process towards the end of last year, six participants had been declared qualified.
The company had earlier said that it would use part of the proceeds from the transactions to bolster its capital expenditure as part of its expansion drive.
XL president director Hasnul Suhaimi had said that the company would also use another part of the funds mobilized to refinance its debts.
To help plug the gap now arising, the company would use its internal cash and hold a rights issue in the second quarter of this year.
Last year, the company’s capital expenditure was $1.25 billion, financed from internal cash flows, bank loans, and bond issues.
As of last July, the company had an outstanding debt of around Rp 9.66 trillion. (JP/fmb)
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