AriaWest sets May deadline for Telkom to settle buyout rift<\/p>\n
JAKARTA (JP): PT AriaWest International has set May as the
\ndeadline for state telecommunication firm PT Telekommunikasi
\nIndonesia (Telkom) to find a solution to the lingering dispute
\nover the buyout price of AriaWest's shares.<\/p>\n
AriaWest said on Sunday that if both parties found no solution
\nby the deadline, it would file arbitration proceedings against
\nthe state company.<\/p>\n
\"I very much regret that unless a final settlement is reached
\nby next month, arbitration in Geneva appears to be the only way
\nforward,\" AriaWest's president John Vondras said in a statement.<\/p>\n
Vondras earlier called on the government, as the majority
\nshareholder in Telkom, to pressurize the state company to
\npostpone its shareholders' meeting from May 10 to sometime in
\nJune so that it and Telkom have enough time to find a final
\nsolution to their dispute and the solution could be presented
\nduring the shareholders' meeting for approval.<\/p>\n
Unless the shareholders' meeting was postponed, Vondras said,
\nthe dispute could drag on.<\/p>\n
\"Our shareholders are not willing to allow this dispute to
\ndrag on beyond that,\" Vondras said.<\/p>\n
Telkom's vice president for corporate communication D.
\nAmarudien said Telkom would stick to its initial schedule for the
\nshareholders' meeting and it was ready to face AriaWest in front
\nof the arbitration panel.<\/p>\n
He said Telkom was optimistic that the arbitration panel would
\nrule in favor of Telkom.<\/p>\n
Telkom's dispute with AriaWest centers around the amount of
\ncompensation Telkom must pay for their partnership.<\/p>\n
AriaWest is one of five firms that are units of foreign
\ntelecommunication giants who signed joint-operating-schemes
\n(KSO). Telkom engaged in such schemes during the mid-nineties to
\ndevelop the country's telecommunication networks. AriaWest was
\nawarded the contract in West Java.<\/p>\n
Under the KSO scheme, partners are required to invest in new
\nfixed lines and operate them under a profit-sharing-scheme with
\nPLN.<\/p>\n
But the KSO scheme became financially unattractive, following
\nthe government's plan to terminate Telkom's monopoly.<\/p>\n
Telkom is thus seeking to buy out the shares of its KSO
\npartners, but so far it has only reached buyout deals with two
\npartners.<\/p>\n
Amarudien said the solution to Telkom and AriaWest's dispute
\nwas elusive given the wide gap between the price set by AriaWest
\nfor its shares and the one set by Telkom.<\/p>\n
According to Amarudien, AriaWest demanded US$1.3 billion in
\ncompensation for its shares, while Telkom valued the shares at a
\nmere $260 million.<\/p>\n
Vondras said that AriaWest had made \"every effort\" to settle
\nthe dispute, including cutting the valuation of its shares to
\n$735 million from $1.3 billion.<\/p>\n
He said the price of $260 million set by Telkom for its shares
\nwas much lower compared to the valuations made by state-owned
\nsecurities house PT Danareksa and ABN-Amro Telecommunication
\nResearch, which set the value of AriaWest's shares at $522
\nmillion and $673 million, respectively.<\/p>\n
Minister of Transportation and Telecommunication Agum Gumelar
\nsaid the government has formed a special ministerial team to help
\nsolve the dispute between Telkom and AriaWest.<\/p>\n
\"The team is aimed to facilitate their (AriaWest and Telkom)
\nseparation. But it should be an amicable separation,\" Agum told
\nreporters on Thursday at the presidential office. (jsk)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ariawest-sets-may-deadline-for-telkom-to-settle-buyout-rift-1447893297",
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