Foreign investors may take stakes in Indosiar

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)