PT Indosat, Indonesia's state-owned international call operator, has announced details of a planned bond issue. Andalan Artha Advisindo, Danareska Securities, Deutsche Securities and Trimegah Securities have been chosen to underwrite the Rp1.5 trillion ($159.7 million) deal.
The initial offering process began on February 12 and will go on until March 7. The public offering for the bonds will take place from April 3 to April 5 and the issue will be listed on the Surabaya Stock Exchange on April 17.
The five-year bonds rated AA-plus by Pefindo (Pemeringkat Efek Indonesia), will be split into two tranches. The first will pay a fixed rate coupon of between 17.5%-18.5% up to maturity. The other will pay the same coupon for the first year, after which it will pay a floating rate based on the average rate of three-month deposits issued by three national banks plus a premium of 2.25% per annum.
Indosat says it will use proceeds from the transaction to enable it to become a "complete and integrated company". Following a legal ruling to open up the international call business to competition, the company is looking at new areas in which to expand its activities.
The company will devote 35% of the funds into developing its cell phone business; 26% will be used to further develop its domestic networks; and 23% will be allocated to improving its international service. The remainder will go into boosting its internet and multimedia infrastructure capability (10%) and developing the international underwater cable communication system.
