XL Axiata plans fundraising to repay US$500m loan

PETALING JAYA: Indonesian mobile operator PT XL Axiata Tbk, controlled by Malaysia's Axiata Group Bhd, is planning to conduct a rights issue to repay its US$500 million (RM2.08 billion) shareholder's loan.
In a statement released yesterday, XL said the capital raising has been structured as a rights issue in order to allow existing shareholders of XL to participate in the future growth of the company.
"To demonstrate its continued commitment as major shareholder of XL, Axiata Group, who currently owns approximately 66.4% of XL, has expressed its intention to fully subscribe for its pro rata rights entitlement under the rights issue.
"Any remaining shares not subscribed for other shareholders in the rights issue are expected to be fully underwritten," XL said.
XL's president director and CEO, Dian Siswarini, said the rights issue is an important step in strengthening the company's foundation as it embarks on the next chapter of its transformation agenda. "Net proceeds from the rights issue will be used to repay our US dollar denominated shareholder's loan," she said.
The rights issue is subject to shareholder's approval through an EGM, scheduled for March 10, 2016, as well as obtaining an effective letter from the Financial Service Authority, with respect to a registration statement to be submitted by the company.
The capital raising is anticipated to be completed by the first half of 2016.
The rights price will be jointly determined and fixed by the board of XL Axiata and standby purchasers and is expected to be no more than 20% discount to the theoretical ex-rights price as of the price fixing date.
The terms of the rights issue, including the price of shares relating to the rights offering and the final number of shares to be offered will be announced in due course.
Credit Suisse and Mandiri Sekuritas have been appointed financial advisers for the rights issue.
Meanwhile, for the financial year ended Dec 31 2015, XL recorded a net loss of 25 billion rupiah mainly due to forex impacts from the strengthening of the dollar.
During 2015, XL had a paid capital expenditure of 4.1 trillion rupiah on efforts to expand its data infrastructure and mobile services which was funded via internally generated funds.
Total debt decreased to 27.0 trillion rupiah from 29.6 trillion rupiah as at the end of 2014 while net debt/earnings before interest, tax, depreciation and amortisation (ebitda) increased slightly from 2.6 times to 2.8 times.