The proposed merger of Indosat Ooredoo and PT Hutchison 3 Indonesia is "credit positive" for Ooredoo as it will result in a slight decrease in its net debt to Ebitda (earnings before interest taxes, depreciation and amortisation), according to Moody's, a global credit rating agency.
At the same time, however, Ooredoo will no longer consolidate Indosat in its financial accounts and the transaction would result in Ooredoo having to share control of its Indonesian operations, the second-highest contributor to the group’s Ebitda, after Ooredoo Qatar, the rating agency said in a note.
On completion of the transaction, Ooredoo will have joint control alongside CK Hutchison of Ooredoo Hutchison Asia, which itself will be the majority owner of Indosat Ooredoo Hutchison with a 65.6% stake, it said, adding Ooredoo would also receive $387mn in cash from CK Hutchison as part of the transaction.
The landmark telecom transaction in Asia with a total transaction value of about $6bn would consolidate the merged company as a stronger second operator in Indonesia with annual revenue of approximately $3bn, Ooredoo had said.
Ooredoo Group currently has a controlling 65% shareholding in Indosat Ooredoo through Ooredoo Asia, a wholly-owned holding company. The merger of Indosat and H3I will result in CK Hutchison receiving newly issued shares in Indosat Ooredoo amounting to 21.8% and PT Tiga Telekomunikasi Indonesia amounting to 10.8% of the merged Indosat Ooredoo Hutchison business.
On completion of the transaction, Ooredoo will have joint control alongside CK Hutchison of Ooredoo Hutchison Asia, which itself will be the majority owner of Indosat Ooredoo Hutchison with a 65.6% stake, it said, adding Ooredoo would also receive $387mn in cash from CK Hutchison as part of the transaction.
The landmark telecom transaction in Asia with a total transaction value of about $6bn would consolidate the merged company as a stronger second operator in Indonesia with annual revenue of approximately $3bn, Ooredoo had said.
Ooredoo Group currently has a controlling 65% shareholding in Indosat Ooredoo through Ooredoo Asia, a wholly-owned holding company. The merger of Indosat and H3I will result in CK Hutchison receiving newly issued shares in Indosat Ooredoo amounting to 21.8% and PT Tiga Telekomunikasi Indonesia amounting to 10.8% of the merged Indosat Ooredoo Hutchison business.
