Feb 24, 2010

CS & Morgan Stanley and BTEL bond

Two foreign investment banks, Credit Suisse and Morgan Stanley may have strong position to be lead arranger and bond underwriter of CDMA-based cellular operator PT Bakrie Telecom Tbk (BTEL) worth US$200 million-US$300 million.
A source familiar with the matter said Credit Suisse is close and has good relationships with Bakrie Group, while Morgan Stanley, that is now led by Andi Purwohardono, former PT Danareksa Sekuritas' president director, is hungry for both debt and equity deals in Indonesia.
Bakrie Telecom will use the proceed from bond issue to refinance its debt. Speaking in January, President Director Anindya Bakrie said the company has a total debt of US$200 million.
"We are underway to get ratings from international rating agency. If we think that the market is favorable for the new issue, we will be in the market soon," he said.
According to him, BTEL, CDMA-based operator with Esia brand, has set target of 14 million subscribers, while capital expenditure will be allocated of US$200 million.
In September last year, Bakrie Telecom posted Rp2.54 trillion in net profit, grew from a year before of Rp1.99 trillion. But, operating profit downed from Rp270.13 billion to Rp223.02 billion in September last year due to ballooning operating expenses.
In return, the operator's net profit dropped to Rp97.33 billion from September 2008's position of Rp121.25 billion. As of September last year, long term debt recorded Rp1.31 trillion from a  year before Rp1.36 trillion.     

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