Saudi Telecom Company (STC) has confirmed its plans to continue with the proposed sale of its 84% stake in the Indonesian operator Axis Telekom. Earlier reports had claimed that a clash between STC and three banks over a $1.2 billion loan to Axis could derail the sale.
Nonetheless, STC affirmed that there had been “no new significant development” since July, when it claimed that the deal was “proceeding as authorised with the company’s board of directors with a potential buyer, senior lenders, and other creditors to reach a satisfactory agreement to all parties.”
However, some of STC’s lenders – including China Development Bank, Deutsche Bank and HSBC – are believed to be resisting pressure from STC to restructure a loan made to Axis in 2011 as they could incur losses of up to $600 million. Since the loan was made, Axis’s ailing business has caused it to breach the original terms.
STC has requested that the loan be restructured according to Axis’s current value of around $600 million to $800 million, which would represent a heavy loss for the banks. Axis is Indonesia’s fifth-largest operator, and STC is currently negotiating the holding’s sale to the third-largest Axiata. The resulting entity would be Indonesia’s second biggest operator.
“In reference to the news reports that have recently been circulating in some local and foreign press, which mention that STC is seeking to restructure the loans of Axis Indonesia, where STC is the majority shareholder, STC would like to emphasise that there is no new significant development to be pointed out beyond what has already been announced earlier by STC on July 21, 2013 on the Saudi Stock Exchange (Tadawul)”, said STC.
