STC Group calls for restructure of $1.2bn loan
Banks resist move, fearing $600m loss
Lenders including Deutsche Bank, HSBC and China Development Bank are resisting calls by Saudi Arabia’s STC Group to restructure a $1.2bn loan, according to a report from Reuters.
The report, which cited unnamed banking and industry sources, stated that restructuring the loan could potentially leave the banks with losses of up to $600m.
STC backed the Islamic loan for Axis Telekom, its operation in Indonesia, in 2011. Axis Telecom’s performance has since declined and the telco is now in breach of some of the loan's terms, the report said, citing four sources aware of the matter.
STC, which owns 84% of Axis, has asked banks to restructure the debt to reflect its true value of $600 to $800m, which would mean the banks could face potential losses of up to $600m on the loan, the sources said.
The lenders, led by Deutsche Bank, are refusing to take a loss and are considering alternatives to recover their money, according to the report.