Indonesia's Indosat plans to sell or spin off tower assets

JAKARTA Wed Feb 26, 2014 4:55am EST

JAKARTA Feb 26 (Reuters) - Indonesia's second-largest telecommunication operator, PT Indosat plans to either spin off or sell its tower assets next year to focus on its core business, the company's CEO told reporters on Wednesday.

No financial details were given, but in 2012 Indosat sold 2,500 towers for $406 million to telecommunication tower provider PT Tower Bersama Infrastructure.

"Next year we have to do something on the tower business because it's a distraction, so we plan to spin it off or sell it," said Indosat CEO Alexander Rusli, adding that the tower business is not considered a core business for the company.

Indosat, a unit of Qatar-listed telecom firm Ooredoo QSC , currently has around 8,000 towers.

The company has also started selling its 5 percent stake in Tower Bersama and has appointed Bank of America Merrill Lynch as adviser.

However, Indosat is struggling with a currency loss due to its $2 billion debt and plans to refinance and convert it into rupiah-denominated debt.

"Our revenue is in rupiah, so it needs to be restructured from dollars to rupiah, either through loans or rupiah bonds, but this can only be done next year " Rusli said.

Shares of the Indosat closed down 0.13 percent at 3,995 rupiah on Wednesday. The broader index was down 0.97 percent.

($1 = 11,667.5 rupiah)

(Reporting by Fathiyah Dahrul, Editing by Matt Driskill)

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