Govt sells 3.1% of Telkom stake in privatization push
Govt sells 3.1% of Telkom stake in privatization push
The Jakarta Post, Jakarta
The government announced on Tuesday that it has raised US$126
million from the sale of a 3.1 percent stake in state-owned
telecommunications firm PT Telkom through a placement.
A statement said that 92 percent of the 312 million shares
sold through the placement at Rp 3,635 -- which began on Monday
night -- went to European, Asian and American investors, while
the rest went to domestic investors.
The sale wrapped up the government's plan to sell 15 percent
of its shares in the publicly listed company.
Last year, the government sold an 11.9 percent stake in Telkom
through a block sale transaction with a price tag of Rp 2,600 per
share, raising some $300 million in proceeds.
The transaction reduces the government's ownership in the
telecom company to 51.2 percent.
Previously, the government held a 66.19 percent stake in
Telkom, the country's largest telecommunications company and
currently holds exclusive rights to local and domestic long
distance telephone services.
News about the sale prompted the Jakarta Stock Exchange to
suspend trading in Telkom in the morning session. It resumed
trading in the afternoon session following government
confirmation.
Telkom's shares closed at Rp 3,775 on Tuesday.
The sale was part of the government's efforts to sell its
ownership in several state-owned enterprises (SOEs) under the
privatization program.
So far however, progress has been slow with the sale of many
SOEs lagging behind schedule.
During the first semester, the government only managed to
collect some Rp 1 trillion from the sale of state international
call operator PT Indosat.
In May, it sold 8 percent of its shares in the company through
a private placement, falling short of the initial target of 15
percent, which was in part due to a lack of interest by investors
and poorly arranged transactions.
From the privatization program, the government is hoping to
rake in Rp 6.5 trillion, to be used partly to help plug the 2002
state budget deficit, which is estimated at more than Rp 42
trillion, or some 2.5 percent of the country's gross domestic
product (GDP).
Aside from the much-needed proceeds, the smooth process of the
program will also pave the way for a revival of confidence among
investors that the country is going ahead with its economic
reform program.
Analysts have welcomed the Telkom sale, saying the transaction
should be positive for the Indonesian economy because it shows
that foreign investors remain interested in several of the
country's valuable assets.
Foreign investor confidence in the country has been thin, with
a 60 percent drop in foreign direct investment during the first
five months of this year due to various factors including legal
uncertainty, the lack of security and labor problems.