Indonesian telecoms carrier PT Indosat has secured an IDR700 billion (USD59.3 million) one-year loan from state bank PT Bank Negara Indonesia (BNI) to help fund its ongoing refinancing programme, capital expenditure and cash flow needs. The company has opted for the short-term loan due to high volatility of the local currency, its president Alexander Rusli said on Monday.
Last month, CommsUpdate reported that Indosat is considering plans to secure bank loans and rupiah-denominated bonds to help finance a buy-back plan in 2015, ostensibly to cut its IDR23.4 trillion of debt. The plan is designed in part to halve the company’s proportion of dollar-denominated debt next year to 25% of the total. Although the company has invested IDR1.6 trillion of its CAPEX in 1Q14 in an effort to modernise its networks, Indosat has seen increasing numbers of users moving to its competitors – such as Telkomsel and XL Axiata. Indosat, majority owned by Qatar’s telco Ooredoo, is setting aside up to IDR9 trillion in capital expenditure in FY2014 and will augment that with IDR7 trillion and IDR7.5 trillion next year. It reported a return to profitability in Q1 2014 following years of losses, with net income reaching IDR800 billion for the period under review, from a net loss of IDR71.1 billion a year ago, fuelled by the popularity of its data and internet services.