AP II to be sold via strategic sale

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.