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State-owned Mitratel eyes $1.8B in biggest IPO in Indonesia ever

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Telkom subsidiary Mitratel is expected to become Indonesia’s ‘biggest independent telecom tower player’ after acquiring some 6,000 towers using the initial public offering’s (IPO) proceeds. TELKOM

State-owned Mitratel eyes $1.8B in biggest IPO in Indonesia ever

Indonesian state-owned telecommunications tower operator PT Dayamitra Telekomunikasi (Mitratel) plans to raise up to 24.9 trillion rupiah ($1.75 billion) through its initial public offering (IPO), which would give it the biggest IPO in the Southeast Asian country’s history.

Mitratel, a subsidiary of Telkom, Indonesia’s largest telecommunications company, plans to sell 24.54 billion shares at 775-975 rupiah apiece through the Indonesia Stock Exchange (IDX), according to its IPO prospectus published on October 26.

The shares amount to a 29.85 per cent stake in the company. Forty per cent of the funds raised will be used to build new towers and upgrade existing ones, 50 per cent to acquire towers and other businesses and the remaining 10 per cent as working capital.

“Through this IPO, Mitratel hopes to attract the attention of regional and international investors,” said Mitratel CEO Theodorus Ardi Hartoko in a press conference on October 26.

He added that over the next five years, Mitratel would focus on raising its tower tenancy ratio and “grabbing opportunities” in 5G-related businesses, such as fibre-optic cables and the internet of things (IoT). The company was also preparing long-term plans to expand operations in Southeast Asia and Asia Pacific.

Mitratel’s prospectus shows that its revenue grew 10.9 per cent year-on-year to 3.23 trillion rupiah in the January-June period, and its net profit grew 4.5 times to 700.7 billion rupiah over the same period.

The value of the tower operator’s IPO is slated to exceed that of Bukalapak, the previous record holder, which raised 22 trillion rupiah through an IPO in July. Bukalapak sold 25.76 billion shares at 850 rupiah apiece.

Mitratel claims to have over 28,000 towers, which is on par with privately owned PT Profesional Telekomunikasi Indonesia (Protelindo), which claims it will have 28,000 towers after completing its acquisition of rival operator PT Solusi Tunas Pratama.

Mitratel investment director Hendra Purnama said the company aimed to add 6,000 towers, which could either be acquired from sister companies or from non-affiliated companies.

Telkom’s 2020 annual report shows that the group had 17,300 towers aside from those under Mitratel, as of December of last year.

Telkom president director Ririek Adriansyah said in a statement that the IPO was expected to help Mitratel “become the biggest independent telco not only in Indonesia but in Southeast Asia”.

THE JAKARTA POST/ASIA NEWS NETWORK

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