AP II to be sold via strategic sale
The Jakarta Post, Jakarta
The government plans to sell its shares in state-owned airport operator PT Angkasa Pura II first to strategic investors and then to the public as part of the privatization program.
The company's president, Eddy Haryanto, said on Thursday that the first phase, that is the strategic sale, should be completed before the end of the year, while the second phase, the initial public offering (IPO), would follow after two or three years.
"Under the strategic sale method, between five and ten percent of the shares in Angkasa Pura II will be sold," Eddy said on Thursday, adding that the shares to be sold under the IPO scheme amounted to 40 percent.
He said the decision to privatize the company using the dual method was aimed at maximizing proceeds.
"The strategic partners will work hard between the first and second stages of the privatization process so that the value of their shares will have increased when the shares are later sold through the IPO. This will give them capital gains," he added.
The management initially said it preferred to privatize the company first through an IPO to obtain a high bid price during the strategic sale.
It argued that the government could test investors' appetite for the company during the IPO. If the market response was strong, the resulting price could be used as a benchmark for a second round sale to strategic investors.
The idea first came after previous attempts over the past two years to sell it to strategic investors turned sour as they offered bid prices that were considered too low.
Angkasa Pura II is among the state enterprises slated for sale this year under the privatization program, which is aimed at raising cash to help finance the state budget deficit.
The government initially targeted the raising of Rp 6.5 trillion (about US$730 million) through the program, but due to the weak results in the first semester, it has revised the target down to Rp 3.9 trillion.
Angkasa Pura II operates 10 airports in the western part of Indonesia, including the country's largest, Soekarno-Hatta International Airport.
Among the foreign investors that are reportedly interested in the company are the British Airports Authority and the operator of Amsterdam's Schipol.