STC asks lenders to restructure Axis loan

News Wireless Indonesia 13 AUG 2013
STC asks lenders to restructure Axis loan
A group of lenders including Deutsche Bank, HSBC and China Development Bank are resisting calls by Saudi Telecom (STC) to restructure a USD 1.2 billion loan that could potentially leave them with losses of up to USD 600 million, Reuters reported, citing banking and industry sources. STC backed the Islamic loan for its Indonesian arm, Axis Telekom, in 2011, but Axis' performance has deteriorated and the company is now in breach of some of the loan's terms, four sources aware of the matter said. 

STC has asked banks to restructure the debt to reflect its true value of USD 600-800 million, but the lenders are refusing to take a loss and are considering alternatives to recover their money, the sources added. The lenders, led by Deutsche Bank, are considering alternatives to recover their money, the sources added. 

The impasse complicates STC's plan to sell Axis Telekom to its rival XL Axiata. STC needs the consent of the creditor banks before it can sell the business. STC declined to comment on the loan negotiations but in a statement confirmed it was in talks to sell Axis as its financial performance has been poor. HSBC and Deutsche Bank declined to comment. 


Categories:

Mobile

Companies:

Axis,  Saudi Telecom,  STC,  Axiata,  XL Axiata

Countries:

Indonesia

Tags:

Financial funding, M&A buyouts & divestments

Related Articles

SAUDI ARABIA 21 JAN 2014

STC FY net profit grows 37% to SAR 9.99 bln

Saudi operator STC announced a 37 percent increase in its net profit for 2013 to SAR 9.99 billion. Full-year revenue reached SAR 45.60 billion, an increase of 2 percent, and EBITDA rose 8.3 percent to SAR 17.42 billion. For the fourth quarter, EBITDA rose 25 percent to SAR 4.50 billion, and net profit was up 822 percent to SAR 2.6 billion. The board recommended the distribution of a total of SAR 1.5 billion in cash dividend for Q4 2013, representing SAR 0.75 per share. STC said its domestic operations incre

MIDDLE EAST 30 OKT 2013

STC Q3 net profit up 73% to SAR 3.37 bln

Saudi Telecom Company's net profit for the third quarter rose by 73 percent to SAR 3.37 billion, and EBITDA increased 22 percent to SAR 4.98 billion. For the first nine months of 2013, net profit amounted to SAR 6.36 billion, down 8 percent from a year earlier due to a writedown on its stakes in Asian operators Aircel and Axis of SAR 1.10 billion and forex losses. Revenues were up 2.5 percent to SAR 34.33 billion, led by 25 percent growth at the controlled international subsidiaries. EBITDA for the nine mon

INDONESIA 26 SEP 2013

XL Axiata buys Axis

Indonesian mobile operator XL Axiata has agreed to acquire competitor Axis Telekom Indonesia from Saudi Telecom Company (STC) and its subsidiary Teleglobal Investments. Under the agreement, Teleglobal will sell 95 percent of Axis' share capital for a cash consideration of USD 100. As part of the deal, XL will settle Axis' USD 865 million in debts. The company said that the consideration represents the enterprise value of Axis, on a cash free and debt free basis. A local Indonesian shareholder will hold the

SAUDI ARABIA 13 SEP 2013

STC resolves USD 1.2 bln Axis loan issue - report

Saudi operator STC has resolved a dispute with creditors over a USD 1.2 billion loan tied to its Indonesian unit, Axis Telekom, by offering to repay about 90 percent of the loan mainly through a sale of the arm, Reuters reported, citing sources familiar with the matter. STC owns 84 percent of Axis and is in advanced negotiations with Axis' rival XL Axiata on a potential sale of the unit. Proceeds from the sale will be largely used to repay the loan, the sources said, speaking on condition of anonymity.

SAUDI ARABIA 15 AUG 2013

STC offers 50% discount on calls to India for national day

Saudi operator STC has announced that it will be offering a 50 percent discount on all outgoing calls, SMS and MMS to India on 15 August, which is India's national day. The offer will be valid for 24 hours and is available for postpaid, SAWA, and Lana customers.

INDONESIA 30 JUL 2013

Indonesia approves XL Axiata-Axis Telekom merger

Indonesian mobile services provider XL Axiata has secured approval from the Ministry of Communications and Information Technology to acquire Axis Telekom Indonesia, reports the Jakarta Globe citing XL Axiata's president director Hasnul Suhaimi. Malaysia's Axiata Group, which has a 66.5 percent stake in XL Axiata, has reportedly offered to acquire Axis Telecom, which is 84 percent controlled by Saudi Telecom Company (STC). The merger is said to give XL Axiata access to the radio frequencies it requires to ex

INDONESIA 23 JUL 2013

STC to sell Indonesia operator Axis - report

Saudi operator STC has begun steps to sell its Indonesian business, Reuters reported, citing banking sources. The state-owned firm has invested heavily in the Indonesian unit Axis Telekom, acquired in 2007, but competitive pressure has dragged on earnings. The company took a non-cash charge of SAR 1.1 billion in the second quarter to write down the value of its investments in Axis and Indian mobile operator Aircel and announced plans for a strategic review of its international operations. STC has moved its

ASIA 22 JUL 2013

STC H1 net profit down 40% to SAR 3 bln

Saudi Telecom Company (STC) posted a decrease of 40 percent in its net profit for the first half of the year to SAR 2.98 billion. The group attributed the lower profits to one-time charges of SAR 1.10 billion to write down its investments in Aircel and Axis and unrealized forex losses of SAR 601 million due to the depreciation of the Turkish Lira, Indian Rupee and Indonesian Rupiah. The disposal of fixed assets with a net book value of SAR 277 million during the first quarter had also an impact on net profi

Just In

15:35

Megafon to deploy private 5G network for mining company Apatit

15:32

Lithuania telecoms watchdog RRT agrees to join IRIS2 EU satellite initiative

15:29

Uztelecom subsidiary TMS Hub to cooperate with Study Guide

15:27

Tcell to broadcast FIFA World Cup men's football on IPTV service

Commentary

5 MEI 10:55

KPN: the art of making one-offs structural

4 MEI 14:25

Open Dutch Fiber outlook: time to restart roll-out?

20 APR 10:36

Netflix back to organic growth and doing just fine

11 FEB 12:29

Odido shareholders face tricky exit after abandoned IPO

Background

1 JUN 00:13

The week in telecom: EU telcos push sovereign services as governments question foreign tech investors

23 MEI 23:42

The week in telecom: Starlink ready to go public, Singapore telco M&A and Google courts AI subscribers at I/O

18 MEI 00:31

The week in telecom: US operators mount rural satellite challenge, Cisco cashes in on AI boom

11 MEI 00:53

The week in telecom: Lumen, NTT turn to data centre market to revive growth, Hutchison exits UK

Complete profile

Before downloading the whitepaper, we would like to ask you to complete your profile with company and position. After confirming you will receive the white paper.