Indonesia to sell Telkomsel shares via IPO

Indonesia to sell Telkomsel shares via IPO

Dow Jones, Jakarta

The government said on Monday it plans to divest its stake in cellular phone company PT Telekomunikasi Selular Indonesia, or Telkomsel, through an initial public offering in September or October.

The government indirectly holds a stake in Telkomsel, Indonesia's largest mobile phone company with around 5 million subscribers, through 51 percent-owned PT Telekomunikasi Indonesia. Telkom has a 65 percent stake in Telkomsel.

The State Enterprises Affairs office has advised the management of Telkom to make preparations for the divestment of its stake in Telkomsel, according to a letter seen by Dow Jones Newswires.

The letter, which was signed by Mahmuddin Yasin, a deputy to Minister of State Enterprises Affairs Laksamana Sukardi, said PT Danareksa Sekuritas and PT Bahana Securities will act as lead underwriters for the IPO.

It didn't specify the size of stake that Telkom will sell in Telkomsel.

Late last year, Laksamana said it will discuss the divestment plan with Singapore Telecommunications Ltd., or SingTel, which holds a 35 percent stake in Telkomsel.

The government plans to raise Rp 8 trillion (US$916 billion) this year through the sale of its assets in state-owned companies to help narrow the budget deficit.