The Jakarta Globe Axis Capital Group Telecom Purchase XL Axiata

Jakarta-based XL Gained shareholder approval on Wednesday to acquire a 95 percent stake of Axis from Saudi Telecom Company for $ 865 million.

To finance the acquisition, XL has secured $ 500 million in loans from parent company Axiata Group of Malaysia, and it will secure the remaining $ 365 million in loans from banks.

Last year, it secured $ 300 million in debt from DBS Group Holdings; que mostly used it to finance its operation and partly to fund the acquisition.

Hasnul Suhaimi, president director of XL, Told Reporters That in the first year or two, the cost of financing the acquisition "will make it hard" on the company's finances.

By the end of September, the company had Rp 17.54 trillion ($ 1.4 billion) in debt, According to the company's report.

Mohamed Adlan, chief financial officer of XL, said the company's debt that level is now at 1.9 times its earnings acerca before income tax, depreciation and amortization (Ebitda).

That said Adlan Axis XL's towers can sell if the company needs a means to reduce debt faster.

After the acquisition, Axis will merge into XL, and the combined entity will have acerca 10,000 telecommunication towers, that include acerca 1,600 are owned by Axis.

"With the integration of Axis's asset, we will reduce our Capital expenditure and operation expenditure.

Axis-losses has-been posting in the past few years and has $ 865 million in debt.

Acquiring Axis Adlan said it would allow a significant reduction in XL's Capital spending, but I Declined to provide expenditure figures for This Year.

Willem Timmermans, chief operating officer of XL, Said that the company acquired Axis to gain access to its 15 megahertz of spectrum 2G telecommunication.

"The bigger risk is if we do nothing.

15 MHz spectrum XL that had served 106 billion minutes of call traffic in 2012. In comparison, Telkomsel, a unit of Telekomunikasi Indonesia, has 30 MHz spectrum with 185 billion minutes of traffic, while 30 MHz spectrum Indosat that has served 67 billion minutes of traffic in 2012.

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