Indosat takes a beating in Alphanet fiasco<\/p>\n
JAKARTA (JP): Indonesia's state-owned international
\ntelecommunications firm PT Indosat is likely to lose much of its
\nC$50.75 million (US$40 million) investment in Canada's Alphanet
\nTelecommunication Inc following the later's bankruptcy
\nannouncement on Monday.<\/p>\n
Indosat president Tjahjono Soerjodibroto said on Tuesday that
\nthe final calculation of the realized loss would still have to
\nwait for the sale of Alphanet's assets organized by
\nPriceWaterhouseCoopers Inc as the trustees.<\/p>\n
\"There will certainly be an impact. But we can't calculate
\nthis yet as PriceWaterhouse is still working on selling off the
\nassets,\" he told reporters at a press conference.<\/p>\n
Once the assets were sold, he said, the proceeds would be
\nfirst divided among creditors including Indosat which bought C$35
\nmillion in convertible bonds.<\/p>\n
Indosat made the bond investment in August 1997 together with
\na C$15.75 million equity investment, purchasing 1.75 million
\nshares (14.5 percent) of Alphanet.<\/p>\n
The book value for the equity and bond investments totaled Rp
\n106 billion (US$40 million at the rate in August, 1997 or $12
\nmillion at the current rate), Tjahjono said.<\/p>\n
Alphanet filed for bankruptcy due to the fact that the
\ncorporation had been unable to secure the necessary financing to
\nenable it to continue operations.<\/p>\n
Although Alphanet had received bids for its AlphaNet
\nHospitality Systems Inc, it was realized that the proceeds from
\nthis sale would not be sufficient to finance operations.<\/p>\n
Tjahyono expected that Indosat's overseas investment loss
\nwould not be detrimental to its privatization process.<\/p>\n
The publicly-listed company is one of the state-owned
\ncompanies to be sold by the government this fiscal year ending in
\nMarch.<\/p>\n
Indosat, which went public in 1994 and is now both listed on
\nthe Jakarta and New York stock exchanges, is 65 percent
\ncontrolled by the government.<\/p>\n
The government plans to further divest 14 percent of its stake
\nin the company to a foreign strategic investor.<\/p>\n
Tjahjono said strategic investor candidates were expected to
\ngive their final bids early next month.<\/p>\n
State Minister for the Empowerment of State Enterprises Tanri
\nAbeng, however, said on Monday that the final bids were expected
\nnext week.<\/p>\n
Tjahjono declined to name the candidates, but Tanri said that
\nAustralia's Telstra was among the serious contenders.<\/p>\n
Tjahjono forecast a 3-9 percent growth in Indosat's 1999
\ntraffic call volume, depending on the development in the
\ncountry's economic and political situations.<\/p>\n
He said the ratio between incoming call volume and outgoing
\ncall volume would remain the same as last year's 1.2 to 1.<\/p>\n
The government raised international telecommunications rates
\nby between 4 and 50 percent in November due to the sharp
\ndepreciation of the rupiah.<\/p>\n
Tjahjono said he did not expect a further increase in the
\nrates as long as the local unit remained stable.<\/p>\n
Indosat announced last week that its net profit had soared to
\nRp 1.16 trillion in 1998, compared to Rp 640.8 billion in 1997,
\nand its total revenue rose by 44 percent to Rp 2.1 trillion from
\nRp 1.45 trillion. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/indosat-takes-a-beating-in-alphanet-fiasco-1447893297",
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