Govt to go ahead with privatization<\/p>\n
JAKARTA (JP): The government will go ahead with its
\nprivatization plans despite the unsatisfactory performance of the
\ninitial public offering of PT Telkom, the state-owned domestic
\ntelecommunications firm.<\/p>\n
Minister of Finance Mar'ie Muhammad said at a hearing with the
\nHouse of Representatives' Budgetary Commission here yesterday
\nthat the government would push ahead with its plans to sell
\nshares in state enterprises on the overseas markets to amortize
\nthe high-interest portion of its external debts fast.<\/p>\n
Mar'ie explained that the government was currently preparing
\nthree state firms for flotation on overseas markets. These are PT
\nKrakatau Steel, toll-road operator PT Jasa Marga, and electricity
\nfirm PT PLN.<\/p>\n
The government also plans to privatize Bank Negara Indonesia
\nand float it on the local stock markets.<\/p>\n
\"Krakatau Steel and Jasa Marga are the best prepared. PLN
\nstill needs restructuring before it can float its shares abroad,\"
\nMar'ie said.<\/p>\n
Director General of State-Owned Companies Bacelius Ruru said
\nthat Krakatau Steel and Jasa Marga are expected to make their
\ncapital market debut next year.<\/p>\n
Indonesia has so far privatized three of more than 200 state
\nfirms on overseas markets. The first was international
\ntelecommunications firm PT Indosat last year, the second tin mine
\noperator PT Tambang Timah last month and PT Telkom this month.<\/p>\n
Ruru stated that the government has established a new
\n\"assistance\" team to the finance minister to help prepare and
\noversee privatization efforts.<\/p>\n
The new team is to replace the disbanded seven-member team of
\ngovernment officials, headed by former secretary general of the
\nfinance ministry Jusuf Anwar.<\/p>\n
Members of the new team include Ruru, Chairman of the Capital
\nMarket Supervisory Agency I Gede Putu Ary Suta, stock market
\nadviser to the finance minister Dahlan M. Sutalaksana, Chairman
\nof the Agency for Financial and Monetary Analysis Marzuki Usman,
\nhead of the legal bureau at the finance ministry Agus Haryanto,
\nand Hari Supangkat from state-owned pension fund PT Taspen.<\/p>\n
Mar'ie's and Ruru's remarks were apparently designed to
\ncounteract speculation from securities analysts that Telkom's
\ndisappointing initial share offering would be likely to affect
\nthe government's privatization plans for the future.<\/p>\n
Telkom initially planned to sell 12.5 percent of its 9.33
\nbillion shares locally and 15 percent internationally. However,
\nTelkom cut its offering price and scaled down its foreign issue
\nby 57 percent to only 30 million American Depository Shares (ADS)
\nat the last minute.<\/p>\n
One Telkom ADS comprises 20 ordinary shares.<\/p>\n
In the end, Telkom raised some US$520 million from its share
\noffering on the New York and London stock exchanges, much less
\nthan the government had initially expected.<\/p>\n
Telkom's issue also failed to push up the bearish local
\nmarkets, securities analysts said.<\/p>\n
The Telkom share price could be maintained above its listing
\nprice of Rp 2,050 (US$.90) largely by heavy buying on the part of
\nits domestic underwriters, they said.<\/p>\n
They contended, however, that Telkom's weak listing price had
\nbeen much influenced by a market slump in Jakarta and the region,
\nand by the dismal debut of Tambang Timah last month. Timah's
\nprice fell by 17 percent from its initial offering price of Rp
\n2,900 after just five days of trading.<\/p>\n
Tambang Timah, which floated its shares on the London Stock
\nExchange, in addition to local markets, collected some $150
\nmillion from its overseas offering.<\/p>\n
Mar'ie noted that the proceeds from the divestment of the
\ngovernment's shares in state-owned companies on overseas markets
\nwould be used to repay its external debts which carry interest
\nrates of over 10 percent per annum ahead of schedule.<\/p>\n
Indosat raised some US$800 million from the sale of its shares
\non the New York Stock Exchange in October last year and Rp 650
\nbillion (US$283.5 million) on the domestic stock market.<\/p>\n
\"That's why we sell shares of state-owned companies on
\noverseas markets. If we sell them only on the local markets we
\ncannot raise foreign exchange to repay our debts,\" Mar'ie said.<\/p>\n
Mar'ie promised that the government would float only good
\nequity on the markets, especially on foreign markets. \"I assure
\nyou that we will not sell bad equity.\" (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-to-go-ahead-with-privatization-1447893297",
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