Saudi Telecom Co. — Capital/Financing Update 2013

Jul 21, 2013

Saudi Telecom Company announces that its engaging in negotiation to sell PT Axis Telekom Indonesia.

7010 · 21/07/2013 19:13:44 · Announcement #31769 · View on Saudi Exchange

Saudi Telecom Company announces that its engaging in negotiation to sell PT Axis Telekom Indonesia.

Saudi Telecom Company (STC) announces that it has entered into negotiations to sell its subsidiary in Indonesia PT Axis Telekom Indonesia. STC owns 80.10% shareholding directly and 3.725% indirectly in Axis. STC invested in Axis in 2007 and in 2011, with these investments STC envisaged that an exposure to fast growing emerging markets and under penetrated markets would provide a platform for future growth. Since the acquisition of Axis in 2007, STC provided significant operational and financial support to Axis and was actively involved in developing the business by supporting the Axis management with initiatives, which leveraged STC Groups presence in multiple markets and implemented both revenue enhancing and cost reduction programs. STC also engaged in collaboration discussions with several telecommunications operators (both within and outside of the Indonesia market) to streamline Axis operations. The financial performance of the company has been poor and it has not been able to deliver growth as expected due to intense competition in Indonesia, a market with more than ten (10) Telecom operators (5 GSM, 5 CDMA and 1 Wimax). STC evaluated all alternatives related to the continuity of Axis, and established that selling the company is one of the best alternative available for Axis stakeholders. Based on the above, STC board on Sunday 12.09.1434H corresponding to 21.07.2013 authorised the management to engage into negotiation with the potential buyer, senior lenders and other creditors to reach an agreement. STC group has reclassified its investment in PT Axis as held-for-sale assets as at 30 June 2013., According to this classification, the group re-measured the net assets related to the investment at fair value and recognised a realized loss of SR 705m

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