Chinese equipment vendor Huawei acquired a near 17 per cent stake in troubled Indonesian mobile operator Bakrie Telecom though a bond conversion, The Jakarta Post reported.
The move by Huawei’s local unit, Huawei Tech Investment, which converts IDR1.23 trillion ($92 million) of debt into shares, will inject much need capital into the publicly listed operator, which shut down its struggling CDMA operations in 2014. Its shares were later suspended after one of its creditors requested a court-supervised debt restructuring.
Bakrie last year issued IDR7.6 trillion in mandatory convertible bonds to restructure its IDR11.6 trillion debt, the newspaper said.
Indonesia Stock Exchange rules limit shares from a conversion from being traded for one year.
Huawei will have the right to put representatives on Bakrie’s board of directors, but Bakrie president commissioner Anindya Novyan Bakrie (pictured) told the Post a decision on the matter hasn’t been made and will be discussed at the next shareholders meeting.
After putting the restructuring in place, he said it is now in the process of developing a business plan for re-launch of services.
The operator owes the government millions of dollars in licence and frequency rights fees. It originally launched CDMA service in 2003 in Jakarta, West Java and Banten and started to offer fixed wireless service in 2007. It had about eight million subscribers at its peak. Last year the Ministry of Communications and Information Technology revoked its fixed wireless access (FWA) and fixed licences.
Indonesia, with a population of 259 million, has at least six mobile operators serving 340 million mobile connections, according to GSMA Intelligence.