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XL Axiata to Issue Shares to Pay Down Debt

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Indonesia's XL Axiata has secured regulatory approval to raise up to USD651 million by selling fresh shares to the public.

The bulk of the revenue raised, some USD500 million will be used to pay down debt to its majority shareholder, Malaysia's Axiata Group.

However, as Axiata Group owns 66.4% percent of the Indonesian mobile network, and doesn't want its stake diluted, it will be buying shares worth US$432.5 million in the offering.

In essence, of the USD500 million in debt repayment, most of it comes from the parent company as a payment to itself.

"This rights issue is an important achievement for XL Axiata, under which XL Axiata will be able to repay debt liabilities amounting to $500 million to our parent company," said XL Axiata Chief Financial Officer, Mohamed Adlan in a statement.

The move will halve XL Axiata's debt to equity ratio to 0.9.

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Tags: xl axiata  axiata group  Indonesia