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)