Govt to sell more stakes in Telkom and Indosat
Govt to sell more stakes in Telkom and Indosat
TOKYO (Dow Jones): Indonesian Investment and State Enterprise Minister Laksamana Sukardi reiterated on Tuesday his target to privatize government stakes in PT Telekomunikasi Indonesia (PT Telkom) and PT Indonesia Satellite Corp. (Indosat) by the end of the year.
"We are planning for an accelerated privatization of Indosat and Telkom Indonesia," said Laksamana at a Tokyo press conference, without indicating a specific date.
In the case of Telkom, he said that rapid technological developments in the telecommunications field made it imperative to sell it quickly before its equipment became obsolete.
"If we don't sell it now, it will become obsolete," he said.
He reiterated that the sales also depended on market conditions and that the financial base of the companies need strengthening to make them more attractive. Cross border tie-ups were also needed and both sales required consultation with parliament, he added.
Telkom and Indosat are two of the most attractive assets on the government for-sale list. Both blue chips are listed in New York and both feature prominently in foreign investor's Jakarta portfolios.
The previous government already pushed through a sale of around 9.6 percent of Telkom last year, raising around $404 million in the process. The government will begin deregulating the telecoms market in 2004.
From the privatization of state-owned companies, Laksamana said that he "didn't see a problem" in the government raising its target of Rp 8 trillion for the 2000 budget.
In Tokyo to drum up Japanese investment in Indonesia, the minister said investors ought to look at the long-term potential of the large market and where the nation has come from instead of the daily headlines.
"Were going to handle the problems. These are the consequences of a major transformation," Laksamana said, noting that most Western governments don't change their structure, but merely change the party in power.
"We're not only changing the flavor of the government, but the recipe, the cook and even the structure of the kitchen."