Foreign banks offer to assist RI privatization

Foreign banks offer to assist RI privatization

JAKARTA (JP): State Minister for the Empowerment of State
Enterprises Tanri Abeng said yesterday 21 foreign investment
banks had offered to underwrite the divestment of the
government's shares in 12 state firms.

Tanri told the media after meeting President Soeharto that the
government would probably choose 10 out of the 21 banks to help
the privatization program, along with 10 local firms.

"We have received offers from 21 international investment
banks to become the financial adviser or lead underwriter, and
also possibly networking to seek strategic partners.

"Next week, we will have a selection because it is impossible
for us to use all 21. Maybe we will use 10. Then from local...
we may chose 10 also. So, every foreign bank will be accompanied
by one local firm," Tanri said.

The government has said it would sell stakes in seven state
firms through initial public offerings (IPOs) and divest of more
shares in five state firms already publicly listed.

The seven firms are PT Krakatau Steel (steelmaker), PT Pelindo
II and PT Pelindo III (port infrastructure and management), PT
Jasa Marga (toll roads) PT Perkebunan Nusantara IV (oil palm
plantations), PT Tambang Batubara Bukit Asam (coal mining), and
PT Angkasa Pura II (airport management).

The five listed firms set for more government divestment are
local telephone operator PT Telkom, satellite operator PT
Indosat, cement producer PT Semen Gresik, tin mining firm PT
Tambang Timah, and nickel and gold mining company PT Aneka
Tambang.

Tanri said the government's shares in one of the five listed
firms had received bids by foreign investors at 100 percent
higher than market prices. But he did not reveal the firm's name.

"So we get 100 percent premium. If, for example, the market
price is Rp 1,000, we already get an offer of Rp 2,000. And
that's because we are transparent and they know that," he said.

He promised that all privatization processes would be
conducted transparently and would not apportioned to certain
parties only.

"How can it be apportioned if all the system and procedures
are so clear and transparent, and everyone can look into them?"
Tanri said.

The minister also said his office would invite one foreign
consultant, local management institutes and accountants to help
his office to draw up blueprints for the future of state-owned
companies, which must be completed by the end of September.

"Why we must be quick, because by the end of this September,
we must have the blueprint for all these state firms: whether
they will be restructured, sold, developed or privatized," he
said.

Tanri also said the government would soon change the directors
of four large state-owned companies. But he declined to name the
four firms, stating only that one of them was a publicly listed
company.

"We will change directors of four large state firms, and we
will do it maybe within two weeks. This is part of reforms and
restructuring (of state firms)," he said.

He said he would call in the presidents and financial
directors of all 159 state firms into his office on June 18 to
discuss four major issues concerning restructuring of state firms
-- management, investment, finance and privatization.

Tanri, one of the country's highest-paid executives until his
appointment to his ministerial post last March, said he would
manage the state firms in a similar way to a multinational
corporation managing its 200 affiliates around the world.

"We will introduce that mechanism," he said.

He said he would also communicate the government's new policy
on investment by the state firms and their more than 1,000
subsidiaries.

He would also set guidelines for state firms to seek
financing, including foreign loans. (prb/rid)