Trikomsel bondholders to get shares in exchange for defaulted notes

[CityFarmer]

Mobile operator defaulted in Indonesia? Debt/equity swap is common, not only in China. Of course, not all debt/equity swaps are equal. This case should be no haircut for bondholder.

Cost of debt, is usually lower than cost of equity due to seniority in repayment. The swap, seems like a good idea for bondholder, under no-haircut, and survival situation.

What do you think?

Trikomsel bondholders to get shares in exchange for defaulted notes
05 Oct 2016 20:29
By Jamie Lee

INDONESIA'S mobile phone operator Trikomsel on Wednesday said bondholders owning a total of S$215 million worth of defaulted bonds due 2016 and 2017 will have their notes exchanged for shares in the company.

Each share is worth 327.4 rupiah. The shares will represent 25.5 per cent of the total shareholding base. This base takes into account a capital injection of US$10.5 million to be offered by March 31, 2017.

The two tranches of bonds refer to S$115 million of notes due 2016 that were meant to pay a coupon rate of 5.25 per cent, and S$100 million of notes due 2017 that were meant to pay 7.875 per cent in fixed interest.

Source: Business Times Breaking News

[Dosser]

Looks like bondholders in PT Berau Coal Energy will get an even worse deal:

http://www.thestar.com.my/business/busin...-the-spot/

Potential investors in the mooted IPO for next year of the Widjajas' power assets business trust should read carefully.

Many moons ago I foreswore ever investing again in any mainland controlled company - there are just too many S-Chip wrecks still littering the list of SGX listed shares. Should the same caution apply to Indonesian companies (I-Chips?). On the one hand I still (painfully) hold some suspended shares in Berlian Laju, on the other hand, First Reit has produced very good returns over many years. Maybe a better personal resolution would be to keep away from anything related to the Widjajas. I am sure Nat Rothschild wishes that he had never met them.

[opmi]

I though Nat Rothschild was screwed by Bakrie?

[Dosser]

I though Nat Rothschild was screwed by Bakrie?

You are right - the Widjajas were in at the end, hovering up some of the crumbs.

[level13]

Many moons ago I foreswore ever investing again in any mainland controlled company - there are just too many S-Chip wrecks still littering the list of SGX listed shares. Should the same caution apply to Indonesian companies (I-Chips?). On the one hand I still (painfully) hold some suspended shares in Berlian Laju, on the other hand, First Reit has produced very good returns over many years. Maybe a better personal resolution would be to keep away from anything related to the Widjajas. I am sure Nat Rothschild wishes that he had never met them.

I can relate fully. For me, both S-chips & I-chips are no-go zones for me. So far i have 90% bad experience investing in these companies. First Reit must be considered an exception, a outlier. 

I would gladly concentrate my efforts in finding worthy investments in other 80% of companies of which 90% is not rotten, rather than trying to find the best ones in remaining 20% of S-chips & I-chips of which 90% are rotten.