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.