Govt to press ahead with plan to buy back Indosat shares

The Jakarta Post, Jakarta

The government will continue with its plan to acquire more shares in the country's second largest telecommunications firm PT Indonesian Satellite (Indosat), a minister says.

State Minister for State Enterprises Sugiharto said on Tuesday that he already had informal discussions with representatives of Singapore Technologies Telemedia (STT), which controls most of Indosat's shares, about the government's plan.

"Indonesia and Singapore have a protected investment agreement that we should respect. Therefore, we are looking for a win-win solution to strengthen the government's position at the company," he said after presiding over a telecommunications investment and partnership forum here.

Indosat, which is listed on the New York, Jakarta and Surabaya Stock Exchanges, is partially owned by STT with 41.01 percent shares and the government with 14.67 percent. The public owns the remaining 44.32 percent.

The government sold 41.94 percent of its stake in the company to STT, through Indonesia Communications Ltd., for about US$631 million in 2002.

Sugiharto said the government would like to have more domination in the company, considering that Indonesians already are the majority on the board of directors.

For that purpose, the minister said he was formulating a plan to see through the government's intention on a "win-win basis" settlement with other shareholders.

At present, five of the nine Indosat directors are Indonesians and it is presided over by Hasnul Suhaimi, Indosat's former director for consumer marketing.

However, Sugiharto refused to mention how many Indosat shares the government would like to acquire.

"It is a publicly listed company, I should respect that. I cannot mention the percentage of shares that the government will acquire as it will affect the share price on the market. Worse still, I could be accused of insider trading," he said. (006)