MGTI gets $215 million loan facility
MGTI gets $215 million loan facility
The Jakarta Post, Jakarta
A group of banks led by DBS Bank in Singapore has agreed to provide a multimillion dollar loan facility to telecommunications company PT Mitra Global Telekomunikasi Indonesia (MGTI) to refinance the latter's existing debts.
In a press release, DBS Bank and state-owned Bank Mandiri are coordinating arrangers for the US$215 million, five-year loan facility for the telecom company.
No details were available on the amount of MGTI's existing debts.
"The fact that eight leading names in the financial community have committed to this syndicate is testimony to the growing confidence in Indonesia's economy and growth prospects," Brent Smith, DBS Bank managing director and co-head of investment banking said in the statement.
Other participating banks are ABN-AMRO, Bank Danamon, DBS Bank Indonesia, Bank Internasional Indonesia, ING Bank and Rabobank International Indonesia.
MGTI is developing some 730,000 telecom fixed lines in Central Java in partnership with state-owned telecommunications firm PT Telkom. In return, MGTI gets a 30 percent share of the revenue for 15 years until 2010.
In September last year, all MGTI's shareholders, which include Telkom's rival state-owned telecommunication firms PT Indonesian Satellite Corp. (Indosat), Widya Duta Infotel, Telstra Global Ltd, NTT Finance and Sumitomo Corporation, agreed to sell their entire stake to PT Alberta Telecommunication (Alberta) for a total $266. The acquisition was completed on Tuesday.
MGTI was one of Telkom's five joint operating partners in developing telecom fixed lines in the country. But the partnership scheme collapsed following the 1997 financial crisis.
Telkom has managed to buy out four joint-venture operations during the past few years, but was unable to take over MGTI due to a disagreement over valuation.
Telkom reportedly valued the company at $250 million, which was unacceptable to MGTI shareholders.
Telkom now has to negotiate the future of MGTI with the new shareholder, Alberta, which is a subsidiary of PT Saratoga Investama Sedaya. Saratoga is controlled by Indonesian business tycoon Edwin Soeryadjaya.
Saratoga has a capitalization of about $32 million in the form of common equity and subordinated debt.