Projects are starting to make more sense
Solusi Sinergi Digital (WIFI) recently announced two major equity-related corporate actions. First, the company plans to raise IDR 5.9 tn through rights issue. Second, NTT East has committed to participate in private placement of IJE (WIFI's indirect subsidiary with 99.6% stake) by investing IDR 4 tn for 49% stake. The substantial financing will provide funding for WIFI's capex to build 4 mn home passes (HP) and ample support for network expansion via inorganic acquisitions and FWA. We maintain our BUY recommendation on WIFI with a target price of IDR 2,500 (8.8x EV/EBITDA 2025F).

Gigantic rights issue shows the company's massive confidence
 Number of new shares issued: 2.95 bn shares, representing 55.56% of issued and paidup capital, with 4.5 ratio, meaning 4 existing shares entitle the holder to 5 rights, with each right convertible into 1 new share.
 Exercise price at IDR 2,000/share, with a proceed target of IDR 5.9 tn which will be used to build 4 mn new home passes (expected to be fully deployed in 2025) in Java.
 The controlling shareholder, ISB, will exercise all of its 1.49 billion rights, contributing IDR 2.97 trillion. Post-transaction, ISB is expected to maintain 50.37% stake.
 Dilution risk: Shareholders who choose not to exercise their rights may face dilution of up to 55.56%. Unexercised rights can be reallocated to shareholders who submit excess orders.
 Timeline: Cum date 11 June 2025, exercise and trading period: 17-23 June 2025.

Welcoming the new, prestigious strategic partner: NTT EastThe ambitious
 On 11 Apr 2025, NTT East signed a shareholder agreement with Jaringan Infra Andalan (JIA) and a share subscription agreement with Integrasi Jaringan Bersama (IJE).
 IJE is an indirect subsidiary of WIFI, with WIFI holding 99.9% stake in JIA while JIA holds 99.7% of IJE shares. As part of NTT Group, which focuses on regional communication, NTT East provides fiber optic internet service (FTTH) in several areas in Japan. NTT Group has 23.72 mn subscribers in Japan, with ~ 58% market share.
 NTT East participated in IJE's private placement with an investment value of IDR 4 tn for 49% stake, which will be paid in cash (and others). The cash will be paid in May or June 2025. After the private placement, IJE's ownership structure will change into: JIA (50.85%), NTT e-Asia Pte. Ltd. (49.0%), LMM (0.15%)
 In addition, NTT East will support IJE's business development by introducing proper standards and tools for the installation, operation, and maintenance of FTTH.

WIFI - Giant Equity Financing

WIFI - Giant Equity Financing

14 April 2025 - 08.28am

WIFI - Giant Equity Financing

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