Saudi Telecom Company (STC) says it is pushing ahead with the sale of its 84 per cent stake in Indonesia’s Axis Telekom, despite media reports of a dispute with banks over a loan to Axis.

STC’s statement said “no new significant development” had occurred since July when it stated the sale was “proceeding as authorised with the company’s board of directors with a potential buyer, senior lenders, and other creditors to reach a satisfactory agreement to all parties”.

However, recent media coverage has suggested tensions with banks over a $1.2 billion loan to Axis Telekom, the fifth-largest operator in Indonesia.

Earlier this month Reuters said lenders including Deutsche Bank, HSBC and China Development Bank are holding out against calls by STC to restructure a loan that could leave them nursing losses as high as $600 million, according to sources.

The loan to Axis was made in 2011 but since then the operator’s performance has worsened and the company is now in breach of some terms of the loan, said sources.

STC has asked the banks to restructure the loan to reflect the changing fortunes of Axis and its current value of $600 million to $800 million. Such an adjustment would leave the bank holding losses of up to $600 million.

The Saudi operator is in negotiations to sell Axis to Axiata, Indonesia’s number three operator. The combination would create the country’s second-largest operator.

“In reference to the news reports that have recently been circulating in some local and foreign press, which mention that STC is seeking to restructure the loans of Axis Indonesia, where STC is the majority shareholder, STC would like to emphasise that there is no new significant development to be pointed out beyond what has already been announced earlier by STC on July 21, 2013 on the Saudi Stock Exchange (Tadawul)”, said STC.