Dec 8, 2010

TOWR buys 1,000 towers from Hutchison

Telecommunication tower provider PT Sarana Menara Nusantara Tbk (TOWR), via its wholly owned subsidiary PT Profesional Telekomunikasi Indonesia (Protelindo), has entered into memorandum of understanding to acquire 1,000 towers at US$110,000 per tower or US$110 million from PT Hutchison CP Telecommunication (HCPT).
In an official announcement submitted to Indonesia Stock Exchange (IDX) today, after HCPT sells 1,000 towers to Protelindo, HCPT will lease back the towers for 10 years.
The sale and leas back depends on negotiation and signing of formal agreement for sale and lease back on 1,000 towers at the end of 2012.
Protelindo is seeking bank loan facility and internally generated cash flow from operations.
Protelindo and HCPT aim to set conditions of the transaction similar with the previous tower transfer agreement and master lease agreement signed by both parties in March 2008, in which Protelindo acquired 3,600 towers from HCPT.
Post completion of the transaction, Protelindo is estimated to manage more than 6,000 towers portfolio entire Indonesia, strengthening its market position as the largest independent tower provider.

Disclosure: No position at the stock mentioned above.  

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