Huawei may acquire stake in Bakrie Telecom
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Huawei is reportedly set to acquire a 9% stake in struggling Indonesian CDMA operator Bakrie Telecom as part of a debt repayment procedure.
Bakrie Telecom secured shareholder approval to issue convertible bonds worth 56% of shares in the company, that will then be divided among its 50 creditors.
The convertible bonds are worth around 7 trillion rupiah ($530.5 million), with a price per share of 200 rupiah, four times higher than the company’s current trading price.
As Bakrie’s largest lender Huawei will receive bonds accounting for 9% of Bakrie Telecom shares. Indonesian independent telecom tower operators Protelindo and SUPR will receive stakes worth 7% and 6.8% respectively, according to the report.
Questions & Answers
Q.What is the primary reason for Huawei acquiring a stake in Bakrie Telecom?
What is the primary reason for Huawei acquiring a stake in Bakrie Telecom?
Huawei is acquiring a stake in Bakrie Telecom as part of a debt repayment procedure. Bakrie Telecom is issuing convertible bonds to its creditors, and Huawei, as the largest lender, will receive a portion of these bonds.
Q.How much are the convertible bonds worth that Bakrie Telecom is issuing?
How much are the convertible bonds worth that Bakrie Telecom is issuing?
The convertible bonds issued by Bakrie Telecom are worth approximately 7 trillion rupiah, which is equivalent to $530.5 million. These bonds represent 56% of the company's shares.
Q.Which other companies are receiving stakes in Bakrie Telecom through this process?
Which other companies are receiving stakes in Bakrie Telecom through this process?
Besides Huawei, Indonesian independent telecom tower operators Protelindo and SUPR are also receiving stakes. Protelindo will get 7% of Bakrie Telecom shares, and SUPR will receive 6.8%.