Providence to exit Indonesia telecom tower business
Providence Equity Partners is set to exit its last investment in Asia outside of India after Profesional Telekomunikasi Indonesia (Protelindo) agreed to buy Indonesian telecom tower platform Komet Infra Nusantara (KIN) for IDR1.4 trillion ($101 million).
The private equity firm provided a IDR460 million loan to Telekom Infranusantara, a subsidiary of Nusantara Infrastructure, in 2014. Nusantara Infrastructure contributed IDR138 billion in equity and proceeded to establish KIN through the combination of Tara Cell Intrabuana and Komet Konsorsium.
The initial portfolio of around 400 towers has grown to 1,400, with over 2,000 tenants. Providence said in a statement that it and Nusantara Infrastructure had overseen KIN's development into one of the region's leading independent providers of telecom services.
Telekom Infranusantara initially had a 69.4% stake in KIN. As of 2016, its holding was 79.6%. Protelindo will purchase Providence's call option in KIN as well as Nusantara Infrastructure's equity interest in Telekom Infranusantara.
KIN's core business is leasing tower space to wireless operators. Its major customers are Telkomsel, XL, Indosat Ooredoo, 3, and Smartfren. Nusantara Infrastructure said the telecom tower unit achieved revenue of IDR263.8 billion in 2016, up from IDR199.4 billion the previous year. Over the same period, gross profit fell from IDR104.2 billion to IDR88.4 billion. The unit accounted for 26.7% and 14.5%, respectively, of Nusantara Infrastructure's revenue and gross profit in 2016.
Protelindo will integrate KIN's telecom tower portfolio with its own, which amounted to 14,562 towers and 24,144 site leases in 2016. Protelindo is a subsidiary of Sarana Menara Nusantara, a Jakarta-listed company that focuses on investing in telecom tower businesses.
Providence's three other Asia-based assets are in India: ShopCJ, a TV home-shopping network that agreed to an acquisition by industry peer HomeShop18 last September; broadband cable provider Hathway Cable & Datacom; and UFO Moviez India, a digital cinema distribution platform that went public in 2015. The firm announced plans last year to scale back its India business.
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