Fitch Ratings has today assigned long-term foreign and local currency Issuer Default Ratings (IDRs) of B to Bakrie Telecom. The Outlook is stable.
Fitch has also assigned an expected rating of 'B' and an expected recovery rating of RR4 to the proposed USD250m notes due 2015 to be issued by Bakrie Telecom Pte. Ltd.The final ratings are contingent upon receipt of documents conforming to information already received.
BTEL plans to use most of the proceeds from the 2015 Notes to fully repay the outstanding principal of its existing syndicated facility of USD145m and bridging loan of US$45m. The remaining proceeds will be used to finance capital expenditure related to its wireless broadband business and for general purpose. BTEL's debt would comprise mainly the 2015 Notes, capital leases of IDR2.6 triliun and an IDR650 billionn bond after the 2015 notes are issued.
BTEL's ratings reflect its position as the fifth-largest cellular telecom operator in Indonesia, with a 5.5% subscriber market share at end-2009. Although the company is Indonesia's second-largest code division multiple access (CDMA) operator, with a 31% market share of this sub-segment at end-2009, the ratings are constrained by BTEL's position as a sub-scale operator in an intensely competitive and fragmented market. Fitch notes that BTEL remains a regional player with about 84% of its subscribers residing in the Jakarta, West Java and Banten provinces. Within the above-named provinces, Fitch estimates that BTEL has a cellular market share of around 20%.
BTEL plans to use most of the proceeds from the 2015 Notes to fully repay the outstanding principal of its existing syndicated facility of USD145m and bridging loan of US$45m. The remaining proceeds will be used to finance capital expenditure related to its wireless broadband business and for general purpose. BTEL's debt would comprise mainly the 2015 Notes, capital leases of IDR2.6 triliun and an IDR650 billionn bond after the 2015 notes are issued.
BTEL's ratings reflect its position as the fifth-largest cellular telecom operator in Indonesia, with a 5.5% subscriber market share at end-2009. Although the company is Indonesia's second-largest code division multiple access (CDMA) operator, with a 31% market share of this sub-segment at end-2009, the ratings are constrained by BTEL's position as a sub-scale operator in an intensely competitive and fragmented market. Fitch notes that BTEL remains a regional player with about 84% of its subscribers residing in the Jakarta, West Java and Banten provinces. Within the above-named provinces, Fitch estimates that BTEL has a cellular market share of around 20%.
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