Govt sells 3.1% of Telkom stake in privatization push<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The government announced on Tuesday that it has raised US$126
\nmillion from the sale of a 3.1 percent stake in state-owned
\ntelecommunications firm PT Telkom through a placement.<\/p>\n
A statement said that 92 percent of the 312 million shares
\nsold through the placement at Rp 3,635 -- which began on Monday
\nnight -- went to European, Asian and American investors, while
\nthe rest went to domestic investors.<\/p>\n
The sale wrapped up the government's plan to sell 15 percent
\nof its shares in the publicly listed company.<\/p>\n
Last year, the government sold an 11.9 percent stake in Telkom
\nthrough a block sale transaction with a price tag of Rp 2,600 per
\nshare, raising some $300 million in proceeds.<\/p>\n
The transaction reduces the government's ownership in the
\ntelecom company to 51.2 percent.<\/p>\n
Previously, the government held a 66.19 percent stake in
\nTelkom, the country's largest telecommunications company and
\ncurrently holds exclusive rights to local and domestic long
\ndistance telephone services.<\/p>\n
News about the sale prompted the Jakarta Stock Exchange to
\nsuspend trading in Telkom in the morning session. It resumed
\ntrading in the afternoon session following government
\nconfirmation.<\/p>\n
Telkom's shares closed at Rp 3,775 on Tuesday.<\/p>\n
The sale was part of the government's efforts to sell its
\nownership in several state-owned enterprises (SOEs) under the
\nprivatization program.<\/p>\n
So far however, progress has been slow with the sale of many
\nSOEs lagging behind schedule.<\/p>\n
During the first semester, the government only managed to
\ncollect some Rp 1 trillion from the sale of state international
\ncall operator PT Indosat.<\/p>\n
In May, it sold 8 percent of its shares in the company through
\na private placement, falling short of the initial target of 15
\npercent, which was in part due to a lack of interest by investors
\nand poorly arranged transactions.<\/p>\n
From the privatization program, the government is hoping to
\nrake in Rp 6.5 trillion, to be used partly to help plug the 2002
\nstate budget deficit, which is estimated at more than Rp 42
\ntrillion, or some 2.5 percent of the country's gross domestic
\nproduct (GDP).<\/p>\n
Aside from the much-needed proceeds, the smooth process of the
\nprogram will also pave the way for a revival of confidence among
\ninvestors that the country is going ahead with its economic
\nreform program.<\/p>\n
Analysts have welcomed the Telkom sale, saying the transaction
\nshould be positive for the Indonesian economy because it shows
\nthat foreign investors remain interested in several of the
\ncountry's valuable assets.<\/p>\n
Foreign investor confidence in the country has been thin, with
\na 60 percent drop in foreign direct investment during the first
\nfive months of this year due to various factors including legal
\nuncertainty, the lack of security and labor problems.<\/p>",
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