Govt to sell more of its shares in six listed firms

JAKARTA (JP): The government will sell more of its shares in six publicly listed firms to foreign investors to raise badly needed funds to finance the government's inflated spending.

Minister of Finance Fuad Bawazier said after meeting President Soeharto yesterday that several investors, especially large fund managers from Europe and the United States, had expressed strong interest in buying the shares.

"They have conveyed their letters of interest to me, and I will transfer them to Pak Tanri (Abeng, state minister of state enterprises)," Fuad told journalists at Soeharto's private residence on Jl. Cendana, in Central Jakarta.

In addition to the six listed firms, the investors were also eyeing another nine non-listed state companies, Fuad said without giving further details.

"This strong foreign interest indicates their continuing confidence in Indonesia."

Despite further sales of shares, Fuad reiterated that the government would retain its controlling stake in all six of the listed firms.

The firms are domestic telecommunications operator Telkom, international telecommunications operator Indosat, nickel and gold miner Aneka Tambang, tin miner Tambang Timah, cement producer Semen Gresik and Bank Negara Indonesia.

"We will use the proceeds to not only strengthen our state budget but also support our balance of payment," Fuad said.

The privatization program is part of the reform package the government has agreed with the International Monetary Fund (IMF) in exchange for a $US43 billion bailout fund.

Indonesia and the IMF are currently holding renegotiations on the implementation of the reform package, focusing on the disbursement of the second $3 billion tranche.

The IMF suspended payment of the bailout fund to Indonesia, saying that the government was dragging its feet over reforms.

IMF Asia-Pacific director Hubert Neiss said yesterday the negotiations, which started March 18, would be completed in "a matter of days" pending the outcome of discussions on private debts.

Neiss said the two sides would continue talks on monetary policies which could be completed today.

"There are still points to be discussed ... corporate debt, that is still an issue."

By the end of last year, Indonesia's foreign debt stood at US$137.4 billion with the private sector accounting for $73.9 billion. The huge private debt has been blamed for contributing to the current economic crisis.

The economic reform package agreed with the IMF in January did not include measures to handle private debt.

David Nellor, the IMF deputy head for the Asia-Pacific region, said in Hong Kong on Monday that private sector debt was a "very complicated" problem.

"Considerable progress has been made in four areas and we are hopeful that an agreement can be reached in the near future," Nellor was quoted by AFP as saying.

Indonesian Coordinating Minister for Economy and Finance Ginandjar Kartasasmita has said Indonesia's private debt settlement remained the largest problem with the IMF.

Ginandjar said talks on monetary policy, establishing a healthy banking sector, fiscal policy and structural reforms were almost completed. Only details are now to be completed.

State Minister of Research and Technology Rahardi Ramelan told journalists after meeting Soeharto that the government, through government regulation No. 35/1997, had formed a holding company for 10 strategic enterprises, including aircraft manufacturer IPTN and shipbuilder PAL.

"The government's shares in the 10 firms will be transferred into the new firm... and this will become the responsibility of the new minister, state minister of state enterprises," Rahardi said.

The 10 strategic firms were formerly controlled by the Strategic Industries Supervisory Agency, formerly headed by B.J. Habibie before his election as Vice President earlier this month.

His deputy Giri Suseno Hadihardjono was also later appointed minister of transportation. (prb)