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)