Telkom secures $63.5m loan

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.