Tower Bersama Infrastructure Signs Deal to Buy Indosat Mobile-Phone Towers

PT Tower Bersama Infrastructure, an Indonesian mobile-phone infrastructure provider, agreed to buy some cellular towers from the country’s largest wireless carrier, PT Indosat, to expand the business.

An exclusive, non-binding agreement was signed today between the two companies, Tower Bersama said in an e-mailed statement without providing details of the transaction. Indosat, based in Jakarta, was planning to sell about 3,000 towers in a deal that may be worth as much as $500 million, two people with knowledge of the matter told Bloomberg News earlier today.

Helmy Yusman Santoso, a director at Tower Bersama, said the company was finalizing the number of towers involved and the amount of the transaction. Indosat will pay Tower Bersama to use the towers after the transaction is completed, he said.

“It will increase our tenancy ratio,” Santoso said. “We could lease it to other tenants because all operators in this country are our clients, all 11 operators.”

The transaction will provide Tower Bersama additional assets to expand in Southeast Asia’s biggest economy while Indosat will get more cash that may help provide more services, said Chandra S. Pasaribu, an analyst at PT Danareksa Sekuritas in Jakarta. The tower business accounted for about 20 percent of revenue at the mobile-phone carrier in the first half, according to an April filing by Indosat.

“It should be a win-win solution for both companies,” Pasaribu said by phone from Jakarta. “Whatever the number of towers, Tower Bersama could have a portfolio that could be monetized.”

Indosat shares closed 2.9 percent higher at 5,250 rupiah in Jakarta trading. Tower Bersama closed about 2.2 percent higher at 2,350 rupiah.

The agreement doesn’t create an obligation on either party to consummate any transaction, Tower Bersama said in the statement. There is no assurance that any transaction will be concluded, the company said, without providing a timeframe.

Citigroup Inc. is advising Indosat, and Barclays Capital is advising Tower Bersama, according to people with knowledge of the matter.

To contact the reporters on this story: Joyce Koh in Singapore at jkoh38@bloomberg.net; Cathy Chan in Hong Kong at kchan14@bloomberg.net

To contact the editors responsible for this story: Philip Lagerkranser at lagerkranser@bloomberg.net

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