JAKARTA - PT Smartfren Telecom Tbk (FREN) will allocate 64% of the proceeds of its rights issue of 171.45 billion shares to pay off loans and interest to Niven Holdings Limited (NHL), non-affiliated creditor. The rights issue will take place for two whole weeks, starting from April 22 to May 6, 2024.

In the prospectus quoted today (1/4), FREN aims to raise IDR 8.72 trillion of fresh funds through the offering of 171.45 billion shares for IDR 50 each. The rights issue ratio is set to 178:75, meaning that for every 178 old shares, the holder may claim 75 new shares.

The management of FREN will allocate IDR 5.48 trillion to pay off loans and interest to NHL, leaving the remaining 36% ot IDR 3.08 trillion to working capital. Then, 80% of said allocation will be channelled gradually as working capital to PT Smart Telecom (Smartel), while another 20% will be used as FREN’s working capital.

Two primary shareholders of FREN, PT Global Nusa Data (GN), owning 23.79% of the shares, and PT Wahana Inti Nusantara (WIN), owning 14.52% of the shares, have declared their decision not to exercise their rights. In the meantime, PT Bali Media Telekomunikasi (BMT), the holder of 9.81% of the shares, will participate in this corporate action plan.

In the 2023 Financial Report, FREN is said to owe credits, after deducting portions that will mature within a year, worth IDR 10.79 trillion. The loans consisted of credit loans of IDR 5.84 trillion, loans to NHL of IDR 5.24 trillion, and loans to Cisco System Capital Asia Pte Ltd of IDR 35.38 billion. (LK/ZH)