Indosat to raise $200m through rights issue<\/p>\n
JAKARTA (JP): International telecommunications operator PT
\nIndosat expects to raise some US$200 million through a rights
\nissue early next year to finance its expansion plans, according
\nto State Minister for the Empowerment of State Enterprises Tanri
\nAbeng.<\/p>\n
Tanri said on Friday that the rights issue would be part of
\nthe government's two-stage privatization plan for the company in
\nthe current fiscal year.<\/p>\n
\"Indosat needs some $200 million to finance infrastructure
\ndevelopment and acquisition plans,\" he told reporters after
\nlaunching the country's blueprint for restructuring state-owned
\ncompanies.<\/p>\n
Indosat, which is 65 percent owned by the government, is
\nlisted both on the Jakarta Stock Exchange and New York Stock
\nExchange.<\/p>\n
The rights issue plan was approved by shareholders at an
\nextraordinary meeting here last week<\/p>\n
Tanri said that the proceeds from the sales of 54.5 million in
\nthe rights issue would be entirely used to finance Indosat's
\nexpansion plans.<\/p>\n
He said that money which would go into the government coffers
\nwould come from the second part of the privatization step via a
\nfurther divestment in the company.<\/p>\n
Tanri said the government planned only to reduce its stake to
\n51 percent in order to retain a majority shareholder status.<\/p>\n
Asked about the possibility of a further divestment to below
\n51 percent, he said: \"We will not make any commitment right now,
\nbut if such a move is profitable we'll consider it.\"<\/p>\n
Indosat is one of the seven state-owned companies listed in
\nthe government's privatization program for the fiscal year ending
\nin March 1999 in a bid to raise $1 billion to help finance the
\nstate budget deficit.<\/p>\n
The government earlier planned to privatize 12 state-owned
\ncompanies to raise $1.5 billion but backed off, citing an
\nunfavorable market condition.<\/p>\n
Speaking to journalists following the launching of the
\ngovernment's master plan on privatization and corporate
\nrestructuring program, Tanri said that the $1 billion target was
\nstill attainable although there were still six state companies to
\nbe sold to strategic investors with only three months left before
\nthe fiscal year ends.<\/p>\n
\"We have already started the bidding process and the responses
\nhave been positive. We expect to have final bids before the end
\nof the fiscal year,\" he said.<\/p>\n
\"The only problem is the security condition here,\" he added,
\npointing out that several countries had forbidden their citizens
\nto travel to Jakarta amid massive riots in the capital.<\/p>\n
Tanri said that he had to send his senior staff overseas to
\nmeet the potential foreign strategic investors to complete due
\ndiligence process.<\/p>\n
The government recently raised $114 million from the 14
\npercent sale of the publicly-listed cement maker PT Semen Gresik
\nto Mexico's cement giant Cemex SA de CV.<\/p>\n
The other state-owned companies currently in the selling
\nprocess are Indosat, port operators PT Pelindo II and PT Pelindo
\nIII, plantation company PT Perkebunan IV, airport operator PT
\nAngkasa Pura II, and the publicly-listed mining company PT Aneka
\nTambang.<\/p>\n
Tanri said that the postponed privatization process for the
\nother five state companies would be carried out in the next
\nfiscal year.<\/p>\n
Tanri said that restructuring state-owned companies is part of
\nthe government's major economic reform programs.<\/p>\n
The government launched on Friday the 118-pages restructuring
\nmaster plan book outlining restructuring and privatization
\nobjectives, methods, and implementation agenda.<\/p>\n
Tanri said that the blueprint for the restructuring of 150
\nstate-owned companies was essential to boost the performance of
\nthe state companies which were generally disappointing even prior
\nto the economic crisis with the average return on capital
\nemployed of 3 percent, compared to 15-20 percent provided by the
\nprivate sector. (rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/indosat-to-raise-200m-through-rights-issue-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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