Indosat seeks Satelindo control<\/p>\n
Dow Jones, Jakarta<\/p>\n
PT Indonesian Satellite Corp. plans to raise up to $400
\nmillion through the issue of dollar-denominated bonds and a
\nrights share issue to buy the 25 percent stake it doesn't own in
\nits cell phone unit from Deutsche Telekom AG.<\/p>\n
A source close to the deal told Dow Jones Newswires Thursday
\nthat Deutsche Telekom has asked for $400 million for its stake in
\nPT Satelit Palapa Indonesia, or Satelindo.<\/p>\n
\"We are still negotiating with Deutsche Telekom to finalize
\nthe purchase,\" the source said, adding the German company has
\nalready signaled it's ready to sell the shares.<\/p>\n
Indosat will own 100 percent of Satelindo if it buys Deutsche
\nTelekom's stake. The state-owned Indonesian telecoms company is
\ntrying to build up its cell phone business to make itself more
\nattractive to foreign investors.<\/p>\n
The government plans to sell 45 percent of Indosat this year
\nto reduce the state's huge budget deficit.<\/p>\n
Indosat's planned rights issue will increase its current
\nshareholders equity by about 5 percent, the source said. The size
\nof the bond will depend on the final valuation of the 25 percent
\nstake and market conditions.<\/p>\n
The plan to issue bonds comes only days after PT
\nTelekomunikasi Selular Indonesia, or Telkomsel, the country's
\nlargest cellphone company, successfully issued $150 million worth
\nof dollar-denominated bonds. The Telkomsel bonds, which are due
\nin 2007 and callable in three years, have a coupon rate of 9.75
\npercent and were priced to yield 9.825 percent.<\/p>\n
Indonesia's more stable political climate, following chaos in
\nrecent years, has given local companies a window to issue
\ninternational bonds. With a dearth of high-yield bonds in Asia,
\ninvestors are slowly returning to Indonesia.<\/p>\n
Still, Indosat's planned bond issue may not attract the same
\ninterest as Telkomsel, whose parent is PT Telekomunikasi
\nIndonesia, another state-owned telecom company.<\/p>\n
Singapore Telecommunications Ltd.'s plans to raise its stake
\nin Telkomsel to 35 percent pending shareholder approval helped
\nwin foreign interest in the Indonesian company's bonds.<\/p>\n
Indosat, however, faces a number of financial problems,
\nincluding Satelindo's huge debt, which means the cellphone
\ncompany isn't able to expand its business. The state-owned
\ncompany said last week it plans to inject $75 million into
\nSatelindo to help improve its unit's financial position.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/indosat-seeks-satelindo-control-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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