Bakrie Unit Secures $50m Loan From Credit Suisse
Bakrie Telecom, a telecommunications unit of Bakrie Group, has secured a bank loan to help refinance its maturing debt, the company said in a statement released in Jakarta on Tuesday.
The Jakarta-based company, the largest Code Division Multiple Access operator in the country, said it had signed an agreement in Singapore with Credit Suisse for a $50 million loan.
The loan will mature in 18 months with an interest rate of 11.5 percent, Bakrie Telecom said.
It said the new loan would set the stage for its planned secondary share sale at the end of next month.
“This will accelerate the revitalization process that the company is undergoing,” Bakrie Telecom’s president, Anindya Bakrie, said in the statement.
The company hopes to raise Rp 754 billion ($80 million) by selling 10 percent of its shares in a secondary offering in August.
Proceeds from the rights issue and money from the new loan will be used to repay a Rp 650 billion bond that matures on Sept. 4.
“Combined with internal cash and the new bank loan, we will have faster financing to pay off the bond liabilities,” Anindya said.
Last week, Fitch Ratings placed Bakrie Telecom’s long-term credit rating on watch for possible downgrade, over concerns that the company would have trouble paying off its Rp 650 billion debt that matures in September.
The company’s Fitch rating is now CCC, seven notches below the lowest investment grade.
“Hopefully [the announcement] can clarify the rumors in the market and clear up any problems in the rights issue process,” Anindya said.
“I’m sure this year that we can bring back the company to the right track as a prominent CDMA telecommunications provider in Indonesia,” he added.
Bakrie Telecom last year reported a net loss of Rp 782.7 billion, largely because of debt financing charges that reached Rp 767.9 billion.
Shares of Bakrie Telecom lost 0.6 percent to close at Rp 181 on Tuesday on the Indonesia Stock Exchange. The shares are down 30 percent this year.