Saudi Telecom Company (STC) says it has reached an agreement with its creditors over a dispute surrounding a USD1.2 billion loan relating to its majority owned Indonesian mobile operation PT Axis Telekom Indonesia (Axis), agreeing to repay roughly 90% of the monies via the sale of the unit. Sources familiar with the situation say that STC has been tussling with creditors such as HSBC Holdings, Deutsche Bank and Citigroup in a bid to avoid potential losses of up to USD600 million, after the state-owned telco asked banks to restructure the loan to reflect Axis’ current value. STC owns 84% of Axis and is in talks with Indonesian rival XL Axiata concerning the possible sale of the unit. Last month STC confirmed that the firm has indeed started negotiations for the sale of Axis, and that with the backing of the STC board of directors talks with ‘a potential buyer, senior lenders, and other creditors to reach a satisfactory agreement to all parties’ are ongoing. US investment bank Lazard is advising STC on the Axis sale, while Moelis has also been hired to handle loan negotiations.
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