Govt to privatize 16 state-owned companies this year

Govt to privatize 16 state-owned companies this year

JAKARTA (JP): The government plans to privatize or divest
ownership in some 16 state-owned enterprises (SOEs) this year in
a bid to raise about Rp 6.5 trillion (US$684 million) to finance
the state budget deficit, an official said on Wednesday.

The director general of state-owned enterprises, I Nyoman
Tjager, said the privatization program would be conducted through
initial public offerings (IPO) or private placements with
strategic investors.

"If the government only has a minority stake (in the SOEs), I
think it would be better if we privatize them through a strategic
sale," he said on the sidelines of a hearing between the Ministry
of Finance and House of Representatives Commission IX for
financial and development planning affairs.

The government initially planned to privatize between eight
and 10 SOEs this year.

Tjager said the SOEs to be privatized this year included
pharmaceutical companies PT Indofarma and PT Kimia Farma;
fertilizer firm PT Pupuk Kaltim; property firm PT Wisma
Nusantara; surveyor firm PT Sucofindo; plantation companies PT
Perkebunan Nusantara III and PT Socfindo; retailer PT Sarinah;
coal mining firm PT Tambang Batubara Bukit Asam; steel
manufacturer PT Krakatau Steel; airport operator PT Angkasa Pura
II; cementmakers PT Indocement and PT Semen Gresik;
telecommunications firms PT Telkom and PT Indosat; and Bank
Mandiri.

"If Bank Mandiri can be privatized this year, I am optimistic
that our Rp 6.5 trillion target can be met," Tjager said, adding
that the country's largest bank had already made a presentation
to his office and planned to complete its IPO in October.

While the government wholly owns the majority of the SOEs
planned for privatization, it only holds minority shares in
several firms, including Wisma Nusantara, Socfindo and
Indocement, which is a private publicly listed company.

The government owns about a 25 percent stake in Indocement,
and it intends to divest all its shares in the company this year.

The government owns a 42 percent interest in Wisma Nusantara,
with the remaining 58 percent held by a Japanese investor. In
Socfindo, the government owns a 40 percent stake, with the
remainder being controlled by a Belgian investor.

According to a government document, the government will divest
14 percent of its stakes in publicly listed Telkom and Indosat.

The document also said the government would only sell between
a 10 percent and 49 percent stake in some fully owned SOEs,
though it plans to sell its entire stake in Sarinah to a private
investor.

The document added that the privatizations would begin in
March with an IPO by Indofarma. But the government has yet to fix
a schedule for the divestment of its ownership in Telkom, Indosat
and Semen Gresik.

Separately, Minister of Finance Prijadi Praptosuhardjo said on
Wednesday the privatization of Pupuk Kaltim did not mean the
company would no longer be obliged to ensure an adequate supply
of fertilizer for domestic use.

He said Pypuk Kaltim's privatization would include a clause
ensuring its new legal status did not disrupt the supply of
fertilizer to the country's agriculture sector. (rei)