Excelcomindo enlarges bond issue to $350m
The Jakarta Post, Jakarta
The country's third largest cellular company, PT Excelcomindo Pratama, said it has enlarged its dollar-denominated bond issue to US$350 million from an initially planned $250 million, after drawing around $1.4 billion in bids.
According to a company press release, the size of the issue had been increased due to strong demand in Asia, the United States and Europe.
The five-year bonds, to be listed on the Singapore Stock Exchange, have an annual coupon rate of 8 percent, with a yield of 8.125 percent and are callable after three years.
The company said that some of the proceeds from the bonds would be used to refinance the company's dollar-denominated debt, amounting to around $293 million, with bank syndicates.
The remainder would be used to help finance the expansion of the company's cellular coverage to allow it to catch up with its rivals -- the country's largest service provider PT Telekomunikasi Seluler Indonesia (Telkomsel) and PT Satelit Palapa Indonesia (Satelindo).
The company has hired Credit Suisse First Boston, Morgan Stanley and UBS Investment Bank to underwrite the bond issue.
Rating agency Standard & Poors has rated the bonds B+, while Moody's has given them a BB.
The Excelcomindo bond issue is the first international bond issue to come out of Indonesia this year. The relatively strong demand should bode well for the government's plan to issue sovereign bonds in the first quarter of this year.
The unlisted Excelcomindo, which offers cellular products under the Pro-XL brand name, is controlled by PT Telekomindo Primabhakti, which owns 60 percent of the company's shares.
Other shareholders are Nynex Indocel Holding Sdn., with 23.1 percent, Asia Infrastructure Fund Ltd. (12.7 percent) and Japan's Mitsui & Co. Ltd. (4.2 percent).
There has been a speculation recently that the company would sell a majority chunk of its shares to regional players in the future in a bid to help boost its performance. Giant telecommunications companies from Malaysia and China are said to be bidding for the stakes.
Currently, Excelcomindo controls about 16 percent of the domestic cellular market, while Telkomsel and Satelindo (including its sister operator IM3) hold 52 percent and 31 percent respectively.
The company has forecast that sales revenue this year would reach around Rp 2.6 trillion (US$313 million).
Excelcomindo previously issued rupiah-denominated bonds worth Rp 1.25 trillion in September, the proceeds from which were also used to refinance some of the company's debt.