TOWR announces renewal of lease agreements expiring over the next 4 years
Jakarta, March 28, 2019 | Source: Company

PT Sarana Menara Nusantara Tbk ("SMN" or "TOWR"), the parent company of Protelindo, KIN and iForte, announced today the renewal and extension of more than 9,000 tower leases coming due over the next four years. The renewal is based on the signing of master umbrella agreements with two major telecom operators in Indonesia. The extension of leases coming due applies to leases expiring from 2019 through 2022. Under these umbrella agreements, the leases are extended for another ten year period effective as of the renewal dates with the longest dated tenor effective through 2032. 

“We have been focusing on renewing tower leases over the last several months as we seek to extend tower leases well before the lease expiry date," stated Aming Santoso, President Director of SMN. "We have now successfully extended the vast majority of contracts coming due over the next 4 years. The successful renewal of leases is a milestone in Indonesia’s relatively young tower sector market."

The first batch of renewed leases will become effective in 2019. All the renewed leases are denominated in Indonesian Rupiah and are in line with Bank Indonesia regulations on pricing in foreign currencies in Indonesia. The monthly base rate for renewals is consistent with current TOWR Rupiah market rates for new tower builds (“BTS”) ) and colocation leases. Renewed leases will be subject to an escalation clause linked to the Indonesian inflation rate on a portion of the lease agreement. 

“TOWR is the largest independent tower infrastructure company in Indonesia with the most comprehensive tower footprint and the broadest fiber-to-tower network of the major independent companies. The renewal of these tower  leases extends the average life of our tower lease contracts to approximately 7.5 years,” stated Adam Gifari, Vice-President Director of SMN. “As a result, our total contracted revenue from all business lines will increase from IDR 26.1 trillion to IDR 43.1 trillion through 2032 including additions from signing of these umbrella agreements.”

SMN is listed on the Indonesian Stock Exchange (“IDX”) under the “TOWR” ticker with equity market capitalisation of approximately IDR 40 trillion. TOWR common stock has recently been included in the IDX80, a newly created index issued by the IDX. The IDX80 stocks are those stocks that are considered the most liquid on the IDX and have a free float which will support active trading of the stock.