Smartfen seals approval to extend US$100 million bond

JAKARTA: Indonesias CDMA-based cellular operator, PT Smartfren Telecom Tbk has restructured US$100 million bond following its latest business plan.Smartfren Telecoms meeting of shareholders last week had approved such debt restructuring. The maturity
Wandrik Panca Adiguna
Wandrik Panca Adiguna - Bisnis.com 30 Mei 2011  |  00:16 WIB

JAKARTA: Indonesias CDMA-based cellular operator, PT Smartfren Telecom Tbk has restructured US$100 million bond following its latest business plan.Smartfren Telecoms meeting of shareholders last week had approved such debt restructuring. The maturity period of the bond was extended from five years to 15 years.Initially, the debt settlement will be fully paid on 1 March 2013, yet, it is extended to 2025 with 10 times of installments, valuing US$10 million per year starting in 2016.Smartfren's bond holders now also have another settlement option, such as bonds conversion into the companys shares. Such conversion can be conducted in every installment payment, referring to the given regulation and law.The companys operating expenses surged subsequent to the merger between PT Mobile-8 Telecom Tbk and PT Smart Telecom, said Smartfren Telecom Finance Director Antony Susilo.The operating expenses surged, thus, we will take several efficiency measures, he explained.With regard to buyback of rupiah-denominated bonds I/2007, valuing IDR606.5 billion, the company in fact extends the offering period until the end of the year, from the initial schedule, 2 May 2011.Smartfren Telecom shall have several ambitious plans following its merger with PT Mobile-8 Tbk, said Smartfren Telecom President Director Rodolfo Pantoja. Some of its plans are the launch of new products and the establishment of new Base Transceiver Station (BTS).This year, the operator seeks to book IDR1 trillion revenue or soared by 165.59% compared to 2010s realization at IDR376.51 billion.The company also scouts 10 million subscribers this year. Smartfrens total customers in the first three months this year was 6.8 million customers.In the meantime, Smartfren will spend US$450 million or IDR3.8 trillion capital expenditure during 2011-2012 merely to add its BTS to 4,500 units.Smartfren Director Merza Fachys expressed his optimism that the company can compete with other giant telco operators as Smartfrens BTS has been able to accommodate 3.5G technology.Such bonds restructuring shall improve Smarfrens financial statement, said analyst at PT Pemeringkat Efek Indonesia (Pefindo) Achmad Kurniawan Sudjatmiko.This particular restructuring that extends bonds maturity period employ relatively lower interest rate.This restructuring extends the maturity period, thus the interest rate is also lower and reducing the interest expense recorded in financial statement, Achmad added. (T02/wiw)

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