Sarana Menara Nusantara to raise $586M for expansion in Indonesia

Sarana Menara Nusantara, a major operator of cellular towers in Indonesia, is planning to raise up to 9 trillion rupiah ($586 million) through a rights issue. This initiative aims to secure shareholder approval during a meeting scheduled for October 25. The funds raised will primarily be allocated to repay debts of its subsidiary, Profesional Telekomunikasi Indonesia (Protelindo), and to enhance working capital, reflecting the company's strategy to strengthen its financial position amidst growing market demands. The telecommunications sector in Indonesia is experiencing rapid growth, driven by an increasing need for cellular infrastructure due to the internet boom. In a strategic move to expand its capabilities, Protelindo's subsidiary, iForte Solusi Infotek, acquired a 90% stake in Inti Bangun Sejahtera for 3.4 trillion rupiah in July. This acquisition is expected to significantly enhance Protelindo's telecommunications infrastructure, increasing its tower portfolio to 34,300 and expanding its fiber network to approximately 170,000 km. Sarana Menara Nusantara is currently the second-largest telecommunication tower operator in Indonesia, following Dayamitra Telekomunikasi, which operates nearly 39,000 towers. The competitive landscape also includes Tower Bersama Infrastructure, which has around 23,000 towers. The Hartono brothers, who control Sarana Menara, have a combined net worth of $48 billion, primarily from their investments in Bank Central Asia and their family's Djarum company. The planned rights issue and subsequent expansion efforts are crucial for Sarana Menara to maintain its competitive edge in a rapidly evolving telecommunications market, ensuring it can meet the increasing demand for cellular services in Southeast Asia's largest economy.