Exclusive: Buyout firms readying sale of $1 billion Indonesia tower operator STP - sources

By Anshuman Daga and Cindy Silviana

SINGAPORE/JAKARTA (Reuters) - Buyout firms Carlyle and Southern Capital Group are in talks to sell their majority stake in Solusi Tunas Pratama in a deal that could value the Indonesian telecoms tower operator at about $1 billion, three people familiar with the process said.

The private equity firms have hired an adviser to find a buyer for their combined stake of nearly 69 percent in Solusi Tunas Pratama Tbk PT (STP) in which they have been invested for more than five years, said the people.

STP is Indonesia's third biggest independent telecoms tower operator and has a market value of 7.40 trillion rupiah ($553 million). Southern Capital-controlled local entities have a stake of 43.2 percent in STP and Carlye -owned entities have 25.5 percent.

 

A deal will mark the first sizeable consolidation in Indonesia's highly fragmented tower sector. In Asia, independent firms have been expanding by buying tower infrastructure from carriers, who are aiming to cut debt and focus on their core business.

A growing base of mobile phone users with an increase in affordability and demand for data in the region - from India to Indonesia - has lured global funds into the tower business, and some are now looking to cash in on their investments.

First-round bids for STP are due by end-August, the people said. STP competes with bigger independent firms Tower Bersama Infrastructure and Protelindo, a unit of Sarana Menara Nusantara , and with many smaller players.

Depending on the interest from bidders, Carlyle and Southern Capital could still end up with a minority stake in STP, they said.

The sources said the two shareholders were looking at a premium that could value the company at roughly $1 billion.

Nobel Tanihaha, president director of STP, declined to comment and referred queries to Carlyle and Southern Capital. The three people Reuters spoke to did not want to be named as the deal talks are not public.

Carlyle declined to comment and there was no response from Southern Capital to emails and phone calls.

PROMISING SECTOR

Two of the people said STP's main investors were in early talks with Protelindo and Tower Bersama, other local firms, global pension and infrastructure funds and regional players.

Sarana Menara declined to say if it was in talks with STP's shareholders.

Helmy Yusman Santoso, chief financial officer at Tower Bersama, also declined to comment but said, "within the growing telecommunications industry, tower sector is still promising. However, this business is a capital-intensive business."

Sources told Reuters that state-run Pt Telekomunikasi Indonesia Tbk PT (Telkom) is seen as one of the potential buyers as it could merge its expanding tower unit with STP and emerge as tower powerhouse.

David Bangun, Telkom's director, confirmed to Reuters that the company was in early talks with STP but said a range of options were being considered for its tower unit business.

The huge potential for wireless services in Indonesia and plans by telecom firms to sell towers underpin strong prospects for independent tower companies, analysts said.

"Telcos want to get out of the tower business and monetise the towers. And on the other hand, small tower players might struggle due to lack of scale and that's when they could be up for sale," said Sachin Mittal, analyst at DBS Vickers Securities.

($1 = 13,375.0000 rupiah)

($1 = 64.1650 Indian rupees)

(Reporting by Anshuman Daga in SINGAPORE and Cindy Silviana in JAKARTA; Editing by Muralikumar Anantharaman)