Yohanes Obor & Aditya Wikarama

IDX Lifts Mobile-8 Trading Ban Due to Debt Restructure

The Indonesia Stock Exchange resumed trading of shares in troubled cellular operator PT Mobile-8 Telecom on Thursday, after the company outlined its debt-restructuring plan, an exchange official said.

“We lifted Mobile-8’s suspension because it explained that its bondholders had agreed to allow the company to restructure its bond debt,” said Eddy Sugito, director for corporate appraisals at the bourse, which is known as the IDX.

Shares in Mobile-8 rose 36 percent on Thursday, closing at Rp 68. Its shares were suspended from trading in March after it failed to make interest payments on 2007 bonds worth Rp 675 billion ($67 million).

In December, it also defaulted on $100 million of payments for 2007 dollar bonds.

In a letter to Mobile-8 this week, the IDX questioned the company’s ability to service its bond debt, as it had a negative cash flow of Rp 16.25 billion as of March 31.

Mobile-8 director Anthony C. Kartawiria said that Rp 41.76 billion of unpaid interest would be paid in four installments, with the first payment scheduled for July 31.

The remaining payments would be made in September, December and March.

The company also agreed to pay Rp 1 billion in penalties to bondholders.

Kartawiria said bondholders had also required Mobile-8 to create a sinking fund of Rp 83 billion, or twice the outstanding interest on its bonds.

He said that the company would initially pay Rp 16.87 billion into the fund over August and September.

The company will use internal cash to pay the debt, Kartawiria said.

Meanwhile, a second hearing over the company’s dollar-denominated bonds has been scheduled for Wednesday in the South Jakarta District Court, Kartawiria said.

DB Trustee, which administers the bonds, appealed against Mobile-8’s default on the interest for the bonds.

Under the bond indenture, Mobile-8 was obliged to buy back the notes after former main shareholder PT Global Mediacom’s stake fell below 51 percent.

Global Mediacom now holds a 19 percent stake in Mobile-8, after selling a 32 percent stake to Dubai-based private equity fund Jerash Investment late last year.

UOB Kay Hian Private currently holds 13.29 percent of Mobile-8, with PT Bhakti Asset Management at 7.28 percent and US-based Qualcomm at 5 percent.

The remaining 23.42 percent is held by public investors.

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