SINGAPORE - Cash receipts from the 10.3 trillion rupiah sale of 6,050 telecommunication towers by Singapore Telecommunications' Indonesian joint venture company will likely support the Singapore telco's dividends, according to DBS Group Research.
In addition, Telkomsel has inked a 10-year lease arrangement with Mitratel to rent tower space after the towers have been transferred to the buyer. No details have been released on the tenancy ratio of these towers and the leaseback price. Upon the conclusion of the tower sale, Singtel will receive about $333 million in pre-tax contributions from the Indonesian associate, Mr Mittal said. This will help the Singapore company meet its dividend obligations for FY21, he added.
More on this topic Meanwhile, RHB said Telkomsel's monetisation of these non-core assets will unlock shareholder value with the shift in capital expenditure to operating expenditure, as well as streamline capex in the longer term.Details of the sale and leaseback terms are"likely to be accommodative" in RHB's view, considering the large number of towers and Mitratel being Telkom's wholly-owned tower arm.
Telkom said in an exchange filing last week that Mitratel will have more than 22,000 towers after it completes the Telkomsel tower acquisition.
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