Indonesian operator XL Axiata is to sell around 3,500 of its telecoms towers to infrastructure player Solusi Tunas for IDR5.6 trillion ($460 million).
The towers have been sold for cash with XL Axiata leasing them back for 10 years, according to a statement. The transaction is due to close by the end of the year.
The deal was struck after a three month tender process and will help Indonesia’s second largest operator reduce its debt.
The sale will leave XL Axiata, which is controlled by Malaysia’s Axiata Group, with 6,500 of its own towers. A Reuters source said the operator may sell more infrastructure but has not decided when it might do so.
“The sale unlocks the value of a part of our tower portfolio at an attractive valuation and on competitive terms. XL will be using the transaction proceeds to partially deleverage,” XL Axiata’s chief executive Hasnul Suhaimi was quoted as saying.
Indonesian operators are attempting to cover the costs of growth by selling or spinning off assets such as towers, lowering their capital expenditure and maintenance costs and cutting debt.
Indosat, the number three operator, sold 2,500 towers to Tower Bersama Infrastructure for $406 million in 2012.
Going against this trend is Telkom Indonesia, parent of the country’s leading operator Telkomsel, which reportedly has plans to also become the country’s largest tower operator in the next three to five years.
Telkom’s likely target is Tower Bersama Infrastructure, one of the two independent tower operators in Indonesia, in which Indosat sold its 5 per cent stake in March.