UPDATE: Indosat Ooredoo has now signed a sale and leaseback agreement with Digital Colony subsidiary Edge Point Indonesia (PT EPID Menara AssetCo) for more than 4,200 telecom towers.
The operator has agreed to sell this portfolio of towers in a transaction valued at USD 750 million, including a supplementary offer, making it one of the largest deals of its kind in Asia. The sale will unlock capital to create value for shareholders and continue to build Indosat Ooredoo’s strong growth momentum through improvements to network performance and the launch of innovative new digital solutions to enhance the customer experience.
Aziz Aluthman Fakhroo, Managing Director of Ooredoo Group, said: “This strategy incorporates a shift towards an asset-light model that will help us unlock significant capital and enable us to focus on our core mission of delivering outstanding digital and enterprise services to our customer base. I extend our gratitude to the Government of Indonesia for its progressive policies that leave a positive impact on the industry, its operators and its people.”
The transaction is expected to close in Q2 2021 subject to customary conditions, including shareholder approval by Indosat Ooredoo at an EGM, which is planned to be held on May 6th. Indosat Ooredoo will lease back space on the towers for a period of 10-years to meet its ongoing requirements.
ORIGINAL STORY: Indosat Ooredoo is reportedly nearing an agreement to sell 4000 towers to Digital Colony for more than $700 million.
Bloomberg reported that Digital Colony plans to make the acquisition through Edgepoint Infrastructure, a venture that it founded in November 2020 in partnership with former Edotco Group CEO Suresh Sidhu. The Singapore-based unit aims to acquire towers and use them to deploy sites in the Asia-Pacific region.
With negotiations reportedly in their final stages, a deal could be announced this week, although representatives from the involved parties offered no comment.
Indosat Ooredoo will hope to use the proceeds from any deal to finance its planned network expansion after registering a net loss of IDR717 billion in 2020.
The operator has generated funds in the past by selling towers, offloading 3100 sites to Mitratel and Protelindo for IDR6.4 trillion ($442.8 million) in October 2019. Together with one-off savings from a corporate restructure and investment in its LTE network, this deal contributed to its registered profit of IDR1.57 trillion in 2019.