Foreign investors may take stakes in Indosiar
JAKARTA (JP): Foreign investors are lining up to acquire the shares of publicly listed television company PT Indosiar Visual Mandiri, in what could mark the first instance of foreign ownership in the television industry, a government official said on Monday.
But Dasa Sutantio, director of asset management investment at the Indonesian Bank Restructuring Agency (IBRA), added their entry must await the new broadcasting law, due out sometime this year.
"Our target is to have the divestment completed within this year," Dasa told reporters, after attending Indosiar's annual and extraordinary shareholders meeting.
IBRA, a financial arm of the Finance Ministry, owns a 53 percent stake in Indosiar, as collateral for debts it took over from the Salim Group conglomerate.
The agency owns Indosiar through PT Holdiko Perkasa, a holding company set up by IBRA to control assets of the Salim Group.
Dasa said that aside from foreign investors, local ones had also expressed an interest in acquiring a stake in Indosiar.
However, he declined to identify the foreign and local investors, and didn't say how many there were.
"At this moment, we are not negotiating with anyone regarding Indosiar's divestment," Dasa added.
To go ahead with the divestment plan, he said, IBRA expected to first finalize the restructuring of Indosiar's debts, worth some Rp 400 billion (about US$35 million).
"Once we've restructured Indosiar's debts, then we can decide whether to sell the stake to a strategic partner, or through a (secondary) public offering," he explained.
He also said he expected the divestment would leave no investors with a controlling stake in Indosiar, but didn't elaborate on his statement.
Dasa said that Indosiar should be sold off this year, in order for IBRA to meet its 2001 revenue target of Rp 27 trillion.
Should his office sell Indosiar to a foreign strategic partner, Indosiar would be the first local television company with foreign ownership.
It was also the first television company to float its shares on the stock market, after it went public in March 2001.
Under the current Broadcasting Law No 24/1997, foreign ownership in the media is forbidden.
At present, legislators are working on a new broadcasting bill, which will allow foreign investors a minority stake in publicly listed television companies.
Nonetheless, the bill will continue to ban foreign investors from establishing a television company, or becoming its founding shareholders.
After first going on air in 1995, Indosiar rose to become the largest television company in terms of overall market share.
Last year, the company's average market share stood at 28 percent, followed by RCTI with 26 percent and SCTV with 24 percent.
Elsewhere, shareholders of Indosiar also approved plans to repay debts worth Rp 400 billion through refinancing.
Under the plan, Indosiar would seek Rp 400 billion in loans from local banks, with PT Bank Danamon Indonesia acting as the arranger.
The company would guarantee the loan with assets worth 125 percent of the loan, or about Rp 500 billion.
Indosiar reported that its net profit this year rose by 1,100 percent to reach Rp 108 billion, as against Rp 9 billion the year before.
In the same period, revenue surged by 91 percent to reach Rp 599 billion, compared with Rp 313 billion a year earlier.
The company attributed the performance to a surge in advertisement revenue, brought about by higher advertisement prices, and longer broadcasting times. (bkm)