Govt hopes to finish Telkom sale next week

Tantri Yuliandini, The Jakarta Post, Jakarta

The government said it was optimistic about closing the sale of a 15 percent stake in state-owned telecommunications company PT Telkom by next week to raise around Rp 4 trillion (US$381 million) in cash.

State Minister for State Enterprises Laksamana Sukardi said on Thursday that the sale process would be conducted by the financial advisors and that the price for the shares would be set according to the current market price. He did not provide further details.

Separately, deputy state minister for state enterprises Mahmuddin Yasin was quoted by Reuters as saying that the sale would yield more than Rp 4 trillion.

"A government decree on the sale will be announced today or tomorrow (Friday)," he told reporters.

The publicly listed Telkom is part of several state-owned companies included in the government's privatization program this year. The program aims at raising around Rp 6.5 trillion in cash to help finance the current state budget deficit, estimated at Rp 54.7 trillion or around 3.7 percent of gross domestic product.

So far, the privatization program has yielded nothing. Earlier the government reduced the privatization proceeds target for this year to Rp 5 trillion.

Shares in Telkom were unchanged at Rp 2,700 per share at the market closing on Wednesday.

Telkom's director of operations and marketing Komarudin Sastrakoesoemah when asked to confirm said that he "does not know".

Telkom director of planning and technology Kristiono also said that he was unaware that the government was to complete the sale next week. "We don't know about the plan. It's a decision made by the (the majority) shareholder (government)."

Telkom's president Muhammad Nazif had said earlier that he did not think Telkom was ready to be sold at this time as the company had yet to resolve its problems with its joint operation (KSO) partners.

But Laksamana has repeatedly said that selling Telkom to a strategic investor was the best privatization strategy amid the current global economic slump because investors had a relatively stronger appetite for telecommunications companies.

Telkom is Indonesia's largest telecommunications company and currently holds exclusive rights over local and domestic long distance telephone services.

The government holds a 66.2 percent stake in Telkom, while the remainder is held by the public.

The other state-owned company is PT Indosat, which currently holds a duopoly for international direct dialing (IDD) services with its subsidiary PT Satelindo.