Govt eyes Rp1.1 from PGN stake sale
Govt eyes Rp1.1 from PGN stake sale
Urip Hudiono, The Jakarta Post, Jakarta
The government is set to offer 7.1 percent of its stake in state-
owned gas distributor PT Perusahaan Gas Negara (PGN) to the
market later this year, as part of its revenue-generating efforts
to bridge the state budget deficit.
The offering, State Minister of State Enterprises Sugiharto
said in a hearing on Monday with the House of Representatives'
Commission VI for trade, industry and state-owned enterprises
(SOEs), was expected to bring in some Rp 1.1 trillion (some
US$110 million).
Sugiharto said the government had initially proposed selling
off up to 30 percent of its stake at PGN but the results from a
management stock option program -- and a final recommendation
from the House -- put the figure at 7.1 percent.
The government currently owns 60.21 percent of PGN, after
conducting in Dec. 2003 an initial public offering (IPO) of the
company, which generated some Rp 1.2 trillion in revenue.
Shares of PGN closed down 2.77 percent to Rp 3,500 on trading
on Monday.
Sugiharto would not provide the exact time line of the PGN
offering, saying the market situation would be the government's
main consideration.
"We're still waiting for the right timing and pricing," he
said.
The House and the government are deliberating another revision
to the budget, with the government expecting Rp 12 trillion in
SOE dividends and Rp 4.5 trillion in SOE share sales to help
cover a revised-up Rp 26.2 trillion deficit.
"With PGN's expected proceeds, the total (revenue from SOEs)
would already be Rp 13.1 trillion -- higher than the target."
Sugiharto said the government was studying its options and was
still considering selling its remaining stakes in three major
state banks -- Bank Negara Indonesia (BNI), Bank Mandiri and Bank
Rakyat Indonesia (BRI).
"BRI has the greatest potential," he said, referring to the
bank's price-to-book value (PBV), the highest of the three.
According to the ministry, BRI has a PBV of 2.91, as compared
to BNI's 1.93 and Mandiri's 1.33.
Sugiharto, however, said if the government was still required
to maintain a controlling stake of above 55 percent in BRI, then
an offering would not bring in much revenue.
The government's holds a controlling 59.5 percent stake in
BRI, with its stakes in BNI and Mandiri at 99.1 percent and 69
percent, respectively.
Offering SOEs through privatization and divestment plans is
controversial, as critics regard it as selling off the nation's
silver to foreigners.
Privatization supporters, however, argue that new ownership
would improve the performance of the SOEs, many of which are
plagued with inefficiency and corruption.