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PT Telkom, the country’s biggest telecommunications provider, has secured a short-term syndicated loan worth Rp 2.7 trillion ($265 million) from two state-owned banks, its chief executive said.

According to Rinaldi Firmansyah, Telkom’s president director, the loan was extended by PT Bank Negara Indonesia (BNI), which will act as the lead arranger and put up Rp 1.7 trillion, and PT Bank Rakyat Indonesia (BRI), which will provide the remainder. The loan has a five-year maturity, including a one-year grace period.

“One of the reasons that they extended us these loans is because we have a relatively low debt-to-equity ratio of 0.5 percent,” Rinaldi said during a ceremony to mark the signing of the loan.

Gatot M. Suwondo, BNI’s president director, said the bank had joined the syndicate as a long-term supporter of Telkom and as a lender that believed the “infrastructure sector is crucial for this country.”

Rinaldi said that Telkom had a raft of capital expenditure plans for the rest of the year, such as the expansion of its Internet broadband service and the development of Internet Protocol Television (IPTV), an Internet-based television service provided through telephone cables.

“Next month, we are running a test on IPTV. We expect to be able to provide commercial services about October or November,” Rinaldi said, adding that Telkom expected to attract up to one million subscribers to IPTV by the beginning of next year.

Telkom has an outstanding Rp 2 trillion debt to the government. Rinaldi said the company was proposing to pay this in installments through separate loans from commercial banks.

The telecommunications provider was one of the state-owned companies that received the so-called investment fund accounts and subsidiary loan agreements originally acquired by the government from foreign lenders.

Rinaldi said Telkom had a capital expenditure target of $2.1 billion this year, of which 70 percent, or $1.47 billion, would come from internal reserves, while the remaining $630 million would be financed by bank loans.

The company’s net profit fell 23.4 percent to Rp 2.5 trillion during the first quarter,partly due to foreign exchange losses, compared with Rp 3.2 trillion in the year-earlier period.