Govt sells 4.15% of Telkom's shares to repay debt

Govt sells 4.15% of Telkom's shares to repay debt

JAKARTA (JP): The government has sold another 388 million
shares in state-owned PT Telekomunikasi Indonesia (Telkom) to
repay its high-interest foreign debt faster, Minister of Finance
Mar'ie Muhammad confirmed yesterday.

Mar'ie, who made the announcement at a hearing with the House
Budgetary Commission, said the shares were traded Tuesday night
on the Jakarta and New York stock exchanges.

Mar'ie said the shares, which were sold on the non-regular
market, made up 4.15 percent of Telkom's paid-up capital.

"The decision was made... after considering foreign and
domestic market conditions and Telkom's current favorable prices.
This is a continuation of Telkom's privatization program," he
said.

The finance minister is the government's nominee shareholder
in all state companies. Telkom is the sole provider of basic
domestic telecommunications services.

State-owned PT Danareksa Sekuritas and PT Bahana Securities
acted as Telkom's placement agents for the domestic market, and
Deutsche Morgan Grenfell was its agent for New York.

"The net proceeds of the sale, amounting to US$600 million,
shall be used to accelerate repayments of the government's high-
interest foreign debt," Mar'ie said.

Mar'ie assured legislators that the proceeds of the sale would
be accounted for as non-tax revenue in the 1996/1997 state budget
ending next March, while the foreign loan repayments would appear
on the expenditure side of the budget.

"But this will be recorded (in the budget) only if the process
of loan amortization has been completed," he said.

Mar'ie said the Telkom shares were offered for between Rp
3,400 (US$1.47) and Rp 3,650 a share.

Telkom shares closed at Rp 3,875 Tuesday night on the Jakarta
stock exchange.

Mar'ie said the government decided to sell on the non-regular
market instead of issuing a second public offering because public
offerings were time-consuming.

"We think it is better to make the sales now because next year
the international market will be over-crowded with the initial
public offerings of international telecommunications firms," he
said.

Deutsche Telekom, he said, was planning to float $12 billion
worth of shares next year.

"We are not pushing our sales on the non-regular market. We
sold as much as the market could buy. Otherwise, these sales may
have a negative impact on Telkom's prices on the regular market,"
Mar'ie said.

Telkom made its domestic and overseas stock market debut last
November, when the government floated 9.33 billion shares, about
20 percent of the company, simultaneously on the New York,
London, Jakarta and Surabaya stock exchanges.

On the New York Stock Exchange, Telkom's initial share price
was US$18.75 an American Depository Share (ADS). One ADS
represents 20 ordinary shares.

Telkom is the 238th issuer on the Jakarta stock exchange, and
the fourth state-owned company to be privatized after PT Semen
Gresik, PT Indosat and PT Tambang Timah.

Telkom reported a $481 million net profit for the first nine
months of this year, up 28.91 percent on the corresponding period
of 1995.

Its operating income rose to $664 million for the third
quarter of this year, up 15.8 percent on the same period last
year.

Telkom's earnings per share increased to Rp 120.59 for the
first nine months of this year, up from Rp 104.58 for the first
nine months of 1995, while earnings per American Depository Share
rose to $1.03 from 92 cents. (pwn)