JAKARTA Feb 5 Indonesia's PT XL Axiata said on Wednesday it will fund its planned $865 million acquisition of mobile phone operator PT Axis Telekom Indonesia with loans from shareholders and financial institutions.
Shareholders will provide $500 million while financial institutions will provide $365 million. The company also may sell some tower assets to help pay off the loans, XL Axiata President Director Hasnul Suhaimi told reporters after shareholders approved the acquisition.
The acquisition is expected to give XL Axiata, which is Indonesia's second-largest telecoms group and part of Malaysia's Axiata Group Bhd, about 21 percent of the market by revenue, key spectrum licences and control of about 10,000 telecoms towers.
Suhaimi added that profits would start to recover from the acquisition within five years.
"After the merger, in 2-3 years our net profit will fall but it will not be a net loss," he said. "The first 1-2 years will be very difficult, but everything will improve in the next five years."
The proposed acquisition of Axis has been approved by the Indonesian stock exchange and financial services authority but still requires the go-ahead from the Commission for the Supervision of Business Competition, which is expected next month.
(Reporting by Fathiyah Dahrul and Eveline Danubrata; Editing by Edwina Gibbs)