Baker & McKenzie Advises on Largest Islamic Financing in Indonesia

A cross-office Baker & McKenzie team has represented HSBC Saudi Arabia, Deutsche Bank and The Saudi British Bank on a USD450 million Islamic financing for PT Natrindo Telepon Seluler (AXIS), the Indonesian mobile operator and subsidiary of Saudi Telecom Company (STC).

The financing formed part of a combined USD1.2 billion financing package, which also included a USD400 million facility to fund equipment purchases from Huawei Technologies of China, underwritten by China Development Bank; and a USD350 million facility to fund equipment purchases from Ericsson, arranged by HSBC, funded by AB Svensk Exportkredit (SEK) and backed by the Swedish Export Credit Agency (EKN).

The transaction is the largest Islamic facility to date in Indonesia. The deal also included the largest Islamic hedge transaction ever carried out in Asia, with the hedge being provided by The Saudi British Bank and Deutsche Bank AG, International Islamic Banking, Malaysia Branch, also represented by Baker & McKenzie.

The Baker & McKenzie team was drawn from the Firm’s Jakarta, London, Bahrain, Amsterdam and Kuala Lumpur Offices. The team was led from Jakarta by Finance & Projects Partner Indri Guritno from Hadiputranto Hadinoto & Partners, member firm of Baker & McKenzie in Indonesia, and from London by Banking Partner Chris Hogan. It also included London Derivatives Partner Bruce Somer, Jakarta Finance & Projects Partner Erwandi Hendarta, Bahrain Banking & Finance Partner Julie Alexander, Amsterdam Banking & Finance Partner Fedor Tanke and Kuala Lumpur Banking & Finance Partner Azizul Adnan.

Ameen Al Shiddi, Chief Financial Officer of STC, commented, “This deal is one of the largest Islamic financing deals in Asia and one of the largest international financing deals in East Asia. This financing will help fund Axis’s expansion and growth strategies for the next five years.”

Baker & McKenzie London Partner Chris Hogan said, “We are delighted to have advised HSBC Saudi Arabia, Deutsche Bank and The Saudi British Bank on this ground breaking transaction. With the increasing internationalisation of Islamic finance, the growth of Islamic finance can be expected to stay strong.”

PT Natrindo Telepon Seluler (AXIS) was represented by Clifford Chance. China Development Bank was advised by White & Case. The EKN facility financiers were advised by Norton Rose.