Private Equity Firm Carlyle Set To Cash Out from Indonesian Firm


March 19, 2015

Private equity firm Carlyle Group is reportedly joining the surge of firms seeking exits from their assets. Carlyle-backed telecommunications tower operator PT Solusi Tunas Pratama (STP) is planning to raise around $400 million by selling more shares. If the plans go through, it will be among the biggest such sale in Indonesia this year.  The Wall Street Journal reported that individuals close to the matter have said the company aims to sell extra shares to institutional and retail investors. The company has previously listed on the Indonesian stock exchange, but it’s now looking to sell more shares.


Little Detailed Information Available
The companies in question have so far remained quiet on the details of the possible sale. It is understood that a possible sale could take place during the second quarter of the year and the hope is to raise around $400 million. The company is among the largest in the country, with around 6,000 telecoms towers in the country. It recently increased its previous tower ownership by buying 3,500 more from mobile operator PT XL Axiata. The private equity firm invested between $100 million and $150 million in October 2012.


Buoyant Markets of Southeast Asia
The Southeast Asian markets have been providing lucrative opportunities for private equity firm exits in the past few months. STP, for example, has gained 28% year to date, with the Jakarta Composite Index having gained 4% since the start of the year. Nonetheless, STP did see its share price drop on Wednesday. Private equity companies have already been gaining from exits in Indonesia. At the start of the year, CVC Capital Partners managed to raise $295 million. The firm sold department store chain PT Matahari Department Store TBK. As already mentioned, if the Carlyle exit is to go through it could raise $400 million.


But it isn’t just Indonesia where firms are able to see such exits. In Malaysia, KKR-backed helicopter servicing company Weststar Aviation Services is currently looking to raise $500 million in an initial public offering.


Investor Appetite Weak for New Offerings
Although deal activity in the region is picking up after relatively slow start, investor appetite is still weak when it comes to new offerings. This is largely due to the uncertainty of global market environment. Dealogic’s data shows that fundraising via equity markets in Southeast Asia has increased by 28% year-over-year, amounting to $4.6 billion since the start of the year. Much of this came from a single deal, as the $1.7 billion IPO by Thailand’s telecoms firm Jasmine Broadband Internet Growth Infrastructure Fund managed to take the top spot in the region’s listings this year.


The region is showing similar trends to the rest of the world. Private equity firms are currently sitting on a lot of equity, but investment opportunities are hard to come by. Exits on the other hand are luring in firms and the STP share sale is another example of this appetite. The situation in Southeast Asia will be interesting to follow and the region could be a good indicator of the global markets in 2015.


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