Government may buy back stake in Indosat from Singapore's firm<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
The cash-strapped government is considering raising its stake in
\nPT Indosat, the country's second-largest telecommunication firm,
\nby buying back shares it sold in 2002 to Singapore Technologies
\nTelemedia (STT).<\/p>\n
Vice President Jusuf Kalla confirmed the plan on Thursday,
\nsaying it formed part of the efforts to boost the government's
\nownership of strategic state enterprises, including Indosat.<\/p>\n
"I haven't heard any plans from STT to raise its stake in
\nIndosat. On the contrary, the government is now calculating (its
\nresources) should the foreign owner (STT) in the company sell its
\nstake," said Kalla at his office.<\/p>\n
"If there is such a possibility, the government expects to be
\nable to enlarge its ownership in the company," he said.<\/p>\n
Kalla, a wealthy businessman, is known for his pro-nationalist
\nviews on business ownership.<\/p>\n
The plan may raise some eyebrows since the source of the funds
\nfor the buy-back is unclear, especially when the state budget is
\nalready overstretched.<\/p>\n
With the higher cost of the fuel subsidy, it is estimated that
\nthe state budget deficit may jump to 1.3 percent of the gross
\ndomestic product (GDP) this year, or about Rp 35.2 trillion
\n(US$36.2 billion).<\/p>\n
Initial projections for the deficit stood at 0.8 percent of
\nGDP or about 20.3 trillion.<\/p>\n
However, Kalla remained upbeat about the plan, saying that
\n"the government will explore several potential resources."<\/p>\n
The previous administration under the leadership of Megawati
\nSoekarnoputri, sold 42 percent of government's stake in Indosat
\nto STT for about US$631 million in 2002.<\/p>\n
The government now has about 14.6 percent in the company, with
\npubic investors holding the remaining 43.4 percent.<\/p>\n
Early this month, STT president and chief executive officer
\nLee Theng Kiat reiterated, after a meeting with Kalla, the
\ncompany's long-term investment commitment in Indosat, and vowed
\nto continue to develop its networks here.<\/p>\n
Indosat's operating revenue has grown by as much as 13.8
\npercent to Rp 2.87 trillion in the first quarter of this year,
\ncompared to Rp 2.52 trillion in the same period last year.<\/p>\n
The company's net profit also jumped by nearly 39 percent to
\nRp 282.8 billion, excluding gains from asset sales in the
\ncorresponding period the year before.<\/p>\n
Indosat shares ended unchanged at Rp 5,700 on Thursday.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/government-may-buy-back-stake-in-indosat-from-singapores-firm-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }