Indonesia's Indosat set to launch stake sale in $1 billion fibre business, sources say

By Yantoultra Ngui

SINGAPORE (Reuters) - Indonesia's Indosat Ooredoo Hutchison (IOH) is set to begin a process to sell a minority stake in its fibre business as early as March, in a deal that could value the asset at over $1 billion, said two people with knowledge of the matter.

The sale would come after IOH received interest from global infrastructure and financial investors as well as strategic firms keen to partner with the company to further expand its fibre optic telecommunications business, one of the people said.

The Jakarta-listed company has not decided on the stake size and could decide against launching the sale process depending on market conditions, the person said.

IOH has hired Citigroup to run the sale, said both people, declining to be identified as the matter was private.

IOH declined to comment on the matter, saying it would disclose every corporate action to authorities in accordance with applicable rules and regulations.

Citigroup declined to comment.

The potential sale comes amid growing global investor interest in digital infrastructure assets in Southeast Asia, a region the Asian Development Bank projects will grow 4.7% this year with the biggest economy, Indonesia, growing 5%.

Larger peer Telkom Indonesia is likely to sell a stake in its data centre business in the second half of this year, a top executive at the firm told Reuters in February.

In September, global investment firm KKR & Co acquired 20% of Singapore Telecommunications' regional data centre business for S$1.1 billion ($825.39 million).

Headquartered in Jakarta, IOH is Indonesia's second-largest mobile telecom company with a customer base of 98.8 million, its website showed.

Its revenue rose 9.6% in 2023 from the year earlier to 51.23 trillion rupiah ($3.29 billion) on strong performance across all business units, its financial statements showed.

Net profit however fell 4.6% to 4.5 trillion rupiah mainly due reduction in one-off gains and higher costs related to depreciation and amortization as well as marketing expenses.

IOH was formed in 2022 via the $6 billion merger of PT Indosat Tbk and PT Hutchison 3 Indonesia. It is jointly controlled by Ooredoo Group and CK Hutchison Holdings, its website showed.

($1 = 15,585.0000 rupiah)

($1 = 1.3327 Singapore dollars)

(Reporting by Yantoultra Ngui; editing by Kane Wu and Christopher Cushing)