By March 2019, BTEL had settled Rp6 trillion debt through PKPU. (Image via: Investasi Kontan)

Restructuring, Huawei to Own Majority of Bakrie's Shares

Alfonsus Adi Putra
Market & Investment
Indonesia Market
Jul 10, 2019
2260
PT Bakrie Telecom (BTEL) stated that when the restructuring of the company is finished, including the mandatory convertible bond (MCB) process owned by its creditors, then the majority of BTEL’s shares will be owned by the Chinese tech giant, Huawei Tech.

BTEL had already filed Suspension of Debt Payment Obligations (PKPU) to the U.S. court, known as Chapter 15, on 29 January 2018, so that the result of PKPU will be considered as settlement for all the American creditors. BTEL estimated that the Chapter 15 request would be finalized by the end of 2019. By March 2019, BTEL had settled Rp6 trillion debt through PKPU.

Now, through PKPU, BTEL’s debt will be settled by equity security or mandatory convertible bond (MCB). By owning MCB, the creditors could convert it to BTEL’s shares.

Should Chapter 15 have been approved, BTEL will conduct an exchange offer, exchanging guaranteed senior notes to new notes which consist of 70% of MCB and 30% of cash, in accordance with regulations of PKPU. The exchange offer is targeted to finish by the 1st quarter of 2020.

CFO of BTEL, Aditya Irawan, stated on Tuesday (9/7) that the period of conversion is lasting until 2024. The amount of MCB published by BTEL consists of 45% of overall shares placed and paid by BTEL. With Huawei, owning 9% of the MCBs. In March 2017, Huawei converted its MCB to 6.18 billion shares worth of Rp1.23 trillion. Currently, Huawei owns 16.83% of BTEL’s shares.

BTEL has been swimming in the deep ocean of debt. By March 2019, the debt had mounted to Rp16.17 trillion, forcing BTEL to record negative equity at Rp15.46 trillion by the end of the 1st quarter of 2019.

Source: https://www.cnbcindonesia.com/market/20190709181857-17-83750/wow-huawei-bakal-jadi-pemegang-saham-terbesar-bakrie-telecom

Market , Investment , Technology , Communication , BTEL , Huawei , Bankruptcy