CVC-backed Link Net cuts size of Indonesia share sale

The initial plan was that First Media, CVC-owned Asia Link Dewa and other shareholders would sell approximately 1.22 billion shares in the company - or a 40% stake - at IDR6,200-6,700 apiece. The price for the bookbuilding process has now been set at IDR6,000 for an approximately 30% interest in Link Net.

This would reduce the total proceeds from IDR8.15 trillion ($676 million) to around IDR5.48 trillion. First Media - which is controlled by the Riady family's Lippo Group, said in a regulatory filing that it still plans to divest an 11% holding, although this will now comprise 7.45% of Link Net's total shares and options for investors to acquire a further 3.55%.

The composition of the rest of the share sale is unclear, but - based on First Media selling 11% - it would appear that the proceeds accruing to CVC and the other investors will be approximately IDR3.5 trillion. CVC is expected to be left with a 33.4% interest in Link Net, with First Media holding 33.6%.

Several institutional players, including BlackRock, Och-Ziff Capital Management and Goldman Sachs, were previously said to have agreed to commit a combined $250 million to the transaction as cornerstone investors. However, the reduction in the size of the placement comes amidst global market volatility and uncertainty about Indonesia in particular following the recent elections.

CVC invested $275 million in Link Net through a bond and share issue in 2011, leveraging ties to Lippo Group that had secured a buyout of Matahari Department Store the previous year. The private equity firm took a 33.94% stake, with the option of increasing it to the 49% foreign ownership ceiling.

This option was exercised when Link Net went public in June 2014. The company raised IDR487 billion as First Media sold 304.3 million shares at IDR1,600 apiece, reducing its stake from 66.06% to 56.06%. The holding fell to 41% as a portion of shares were transferred to Asia Link Dewa.

Link Net's network covers more than 500,000 homes across Greater Jakarta, Surabaya and Bali, which have combined population of approximately 37 million. The company owns and operates the largest two-way high-speed broadband service, providing internet access to retail and business customers, including the delivery of data communication and cable TV services.

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• Topics
• Exits
• Media
• Southeast Asia
• Exit
• Sell down
• Media
• Indonesia
• Southeast Asia
• CVC Capital Partners