Telkom secures $63.5m loan
Debbie A. Lubis, The Jakarta Post, Jakarta
State telecommunications company PT Telkom said on Wednesday that it has signed a US$63.5 million loan to finance the development of its transmission network project in Sumatra.
Telkom finance director Mursyid Amal told The Jakarta Post that $51.35 million would be provided by a Citibank-led consortium, and another Rp 173 billion would come from Bank Central Asia (BCA).
Other foreign lenders providing the loan facility include Germany's Hermes Kreditversicherungs AG and Italy's Servizi Assicurativi del Commercio Estero.
"This (loan) reflects the confidence of foreign institutions in the growth of Indonesia's telecommunications industry and Telkom's financial strength," Mursyid said.
Mursyid said that the High-Performance Backbone Transmission Sumatra Project was aimed at improving the quality of telecommunications services in Sumatra and to prepare Telkom to provide international telecommunications services in 2004.
Telkom plans to build a total 2,990 km of transmission links covering the Medan-Pekanbaru-Jakarta, Batam-Pekanbaru, and Padang-Pekanbaru links.
Telkom's existing capacity in Sumatra cannot meet the demands of corporate and household subscribers. This has resulted in a loss of potential revenue during peak telecommunications traffic hours.
The publicly-listed company said that it had chosen a Pirelli- Siemens consortium as the supplier of the Sumatra project, and had signed a contract worth $53.35 million and Rp 173 billion.
The project is expected to be completed in twenty months, the company said.
Telkom shares were unchanged at Rp 4,550 on Wednesday.
Telkom is hungry for cash to finance various projects.
The company is also planning to issue bonds in the domestic and overseas markets, worth between $100 million and $150 million, later this year.
JP Morgan has been appointed to lead the international bond offer, while domestic offering would be led by Citicorp Sekuritas Indonesia, PT Andalan Artha Advisindo, and PT Danareksa Sekuritas.
Earlier this month, Telkom sold its 12.72 percent stake in cellular operator PT Telkomsel to Singapore Telecommunication Ltd (Singtel) for $429 million.