Govt to sell up to 10% of PGN stake this year

Govt to sell up to 10% of PGN stake this year

Indonesia plans to sell as much as 10 percent of state-run gas distributor PT Perusahaan Gas Negara (PGN) this year, part of a strategy to bridge the budget deficit.

"For PGN, the stake that will be sold is maximum 10 percent," State Enterprise Minister Sugiharto said on Monday.

The government also plans to sell this year a part of a publicly traded state-controlled bank, or banks, he said, without giving more details.

Indonesia's deficit is swelling as higher fuel prices increase its fuel subsidy cost.

This year's budget deficit may rise to Rp 35.2 trillion (about US$3.6 billion), or 1.3 percent of the gross domestic product (PGN), compared with the targeted Rp 20.3 trillion, or 0.8 percent, the government said.

The government this year aims to raise Rp 3.5 trillion selling stakes in non-bank, state-owned companies and Rp 4 trillion selling stakes in banks, according to the 2005 budget.

"We still have five and half months to go," Sugiharto said. "I'm optimistic we can achieve the sales target."

PGN, in which the government holds a 60.2 percent stake, fell Rp 25, or 0.8 percent, to Rp 3,075 at the 4 p.m. local time close on the Jakarta Stock Exchange. The shares have gained 62 percent this year.

Indonesian government has 69.47 percent of PT Bank Mandiri, Indonesia's biggest lender by assets, 58.92 percent of fourth- largest lender PT Bank Rakyat Indonesia, and 99.1 percent of PT Bank Negara Indonesia, the third-largest lender, according to Bloomberg data.