Indosat Ooredoo announced the signing of a sale and leaseback agreement with Digital Colony subsidiary EdgePoint Indonesia for more than 4,200 telecommunications towers.
The telecommunication provider in Indonesia has agreed to sell the towers in a transaction valued at USD $750 million, including a supplementary offer, making it one of the largest deals of its kind in Asia.
The tower sale will unlock capital to build on Indosat Ooredoo’s growth momentum through improvements to its network performance and the launch of new digital services.
The telco president director and CEO Ahmad Al-Neama said the deal was “the third and final sale of assets from Indosat Ooredoo’s high-quality tower portfolio that moves us towards a more asset-light model and greater focus on delivering outstanding mobile digital services”.
Indosat Ooredoo will lease back space on the towers for a period of 10-years to meet its ongoing requirements.
Suresh Sidhu, CEO of Edge Point Group, said: “This deal is one of the largest of its kind in Asia and cements our position as a leading tower provider in Indonesia.”
The transaction is expected to close in Q2 2021 subject to customary conditions, including shareholder approval by Indosat Ooredoo at an EGM, which is planned to be held on May 6th.
The sale is part of Ooredoo Group’s strategy to move to a more efficient and flexible asset light model and unlock the trapped value of its infrastructure portfolio. Prior to this deal, Ooredoo had a global portfolio of approximately 27,000 owned towers, representing an infrastructure portfolio of significant value for the Group.
Monetizing these assets to create more value for both shareholders and customers is a key focus of Ooredoo’s current strategy.
The operator has generated funds in the past by selling towers, offloading 3100 sites to Mitratel and Protelindo for $442.8 million in October 2019. Together with one-off savings from a corporate restructure and investment in its LTE network, this deal contributed to its registered profit of IDR1.57 trillion in 2019.