TV industry seeks foreign boost<\/p>\n
By Antariksawan Jusuf<\/p>\n
JAKARTA (JP): In which direction is the Indonesian terrestrial
\ntelevision industry heading? Will it be a part of global TV
\nnetworking?<\/p>\n
The simplest answer is: Are there any foreign interests in the
\ncountry's television industry at all? Press reports and rumors
\ncirculating in industry circles have it that foreign investors
\nare still eying up the stations here. However, a foreign
\nconsultant in the industry said the situation is more the
\nreverse: the industry needs a foreign boost.<\/p>\n
Rupert Murdoch's News Corp., was reported in June as \"almost
\nready to clinch a deal\" with the country's first-commercial
\nstation RCTI. The deal failed because both parties wanted to hold
\ncontrolling stakes. It was not the first time RCTI received
\ninterest from overseas investors. Other high profile Hollywood
\nfirms such as Columbia Tristar were earlier on the list of would-
\nbe investors.<\/p>\n
Indonesian third-ranked station SCTV was reported as having
\nheld talks with Arab Radio and Television (ART) of Egypt as its
\npossible new strategic investor, an industry source said.<\/p>\n
ART is expected to buy shares from AGIS, a subsidiary of
\nIndonesian investment firm Bhakti Investama, which earlier this
\nyear took over SCTV from Datakom Asia and Mitra Sari Persada.
\nU.S. investor George Soros owns 14 percent of Bhakti Investama<\/p>\n
On April 24, Bhakti said it had signed an agreement to acquire
\n100 percent of the shares in SCTV. Shares in SCTV belonging to
\nPeter Gontha's Datakom Asia and Mitra Sari Persada, which is
\nowned by businessmen Henry Pribadi and Sudwikatmono, were
\nbelieved to have been swapped for shares in AGIS.<\/p>\n
The source said that Bhakti's core business is not in the
\nbroadcasting industry. \"It bought SCTV shares to make a short-
\nterm investment, to make money, not to hold on to the business,\"
\nthe source said.<\/p>\n
Indonesian's current \"outdated\" broadcasting law number
\n24\/1997 still bans foreign holdings in the broadcasting industry.
\nMany criticize the law as not anticipating the pressures for he
\ncreation of a global industry. The media and broadcasting
\nindustry is also still listed on the Foreign Investment Negative
\nList issued by the ministry of trade and industry.<\/p>\n
In a bid to avoid such restrictions, it is SCTV's holding
\ncompany, which is now in the hands of AGIS, that is being offered
\nfor sale, the source said.<\/p>\n
Meanwhile, the source also stated that ABS-CBN of the
\nPhilippines has also expressed interest in buying the Salim
\ngroup's terrestrial station Indosiar Visual Mandiri (IVM).<\/p>\n
Head of the Indonesian Bank Restructuring Agency's (IBRA)
\nAsset Disposal Unit Dasa Sutantio told the press that IBRA plans
\nto sell the assets of the Salim group, including BCA (Bank
\nCentral Asia).<\/p>\n
Shortly after the crisis, several Indonesian banks, including
\nBCA, were taken over by the government's IBRA as part of their
\nrecapitalization.<\/p>\n
The Salim group's subsidiaries whose shares are to be sold off
\nhave been placed under a holding company set up by IBRA, called
\nPT Holdiko Perkasa.<\/p>\n
\"They want a strategic investor and to make an IPO (Initial
\nPublic Offering) before the end of the year,\" said a source at an
\ninternational securities firm.<\/p>\n
IBRA, which holds 50 percent of IVM's shares, expects to raise
\nRp 5.2 trillion (US$559.13 million) from the sale of tycoon Liem
\nSioe Liong's Salim group, out of total Rp 18.9 trillion ($2.03
\nbillion) targeted in this year's state budget.<\/p>\n
Salim assets to be sold by PT Holdiko Perkasa include the
\nWisma BCA building, palm oil plantations, a granite quarry, sugar
\nrefineries, MSG producer Indomiwon, the Indomilk dairy and the
\nIndosiar television station.<\/p>\n
However, whether the Indonesian stations will realize what is
\nexpected of them is another story.<\/p>\n
A foreign television consultant who declined to be identified
\nsaid there are several factors to be considered before foreigners
\nwill establish a presence here.<\/p>\n
\"This country has great potential being the fourth largest
\nnation in the world, but there is political uncertainty and the
\nlegal system is a mess,\" he said.<\/p>\n
\"Foreign investors will ask why should I invest here? They
\nprefer Korea or Singapore,\" he added.<\/p>\n
He said the Indonesian television industry has been trying to
\nbring in foreign investors since 1998, citing big names such as
\nHong Kong-based STAR TV and GE which have been window shopping in
\nthe past.<\/p>\n
\"It is now already the year 2000 and they are still only
\nlooking,\" he said.<\/p>\n
He said that the local television industry needs foreign
\ninvestment to improve its performance. \"They cannot expand. They
\ncannot add facilities...I say whoever gets the dollars first,
\nputs in $100 million dollars, will be able to dominate.\"<\/p>",
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