Indosat given option to buy 'TPI' shares

JAKARTA (JP): Publicly listed international telecommunications provider, PT Indosat, agreed yesterday to buy convertible bonds worth Rp 150 billion (US$45.4 million) issued by PT Cipta Televisi Pendidikan Indonesia (TPI).

Indosat's president, Tjahjono Soerjodibroto, said after signing the deal that, with the purchase of the five-year bonds, Indosat had an option to own up to 30 percent of TPI, a private broadcasting station owned by President Soeharto's eldest daughter Siti Hardiyanti Rukmana.

"This is the impact of the convergence (of telecommunications, broadcasting and computer fields). We hope to fulfill each other," he told reporters about the deal.

He said his company would prepare interactive multimedia services through a series of expansions in multimedia businesses already completed.

"This is a new spectrum which includes production house, distribution, broadcasting and customer services," he said after signing the agreement with Siti Hardiyanti Rukmana who is popularly called Tutut.

"TPI has a bright future. Just like an airplane, TPI's load factor is now just 20 percent and has the chance to increase the rate," he added.

At present, Indosat partly owns PT Datakom Asia, a holding company controlling a pay-television provider and a satellite operator; Suginami, Japan-based cable television station; PT Multi Media Asia, a multimedia satellite operator and PT YTC, a multimedia production house.

Tutut said that TPI would use the funds from Indosat to develop relay stations in some areas in the country, to improve its programs and services and to pay some of its liabilities.

Professionalism

"Indosat buys the bonds not because it empathizes with TPI and not because I'm the daughter of President Soeharto. This is about professionalism and the prospective future of TPI," she said.

TPI is one of five private television stations. The company has so far suffered from financial problems. Sources said that by the end of August, TPI would have Rp 406 billion total assets and debts of Rp 151 billion.

Tutut admitted yesterday that TPI's management is now under an improvement plan.

TPI's director Ishadi S.K. said that TPI planned to float its shares on the domestic stock exchanges in 2000.

He said that about 35 percent of the broadcasting station would be sold to the public during the initial public offering (IPO).

After the IPO, TPI will be 30 percent owned by Indosat, 35 percent by the public and the remaining 35 percent by Mbak Tutut, he said, adding that at the time of the share flotation, TPI's total assets would reach Rp 700 billion.

In an attempt to make TPI a better station, Tutut also signed yesterday an agreement with the Australian-based Seven Network Ltd., a company which owns several studios and facilities in various cities in Australia.

The agreement stipulates that the Seven Network, which owns Channel-7 in Australia, will supply TPI with broad ranging management expertise and technical services.

Chief operating officer of Seven Network Asia, Doug Fraser, said that TPI would become the most competitive television network in Indonesia. "We will be working together as an integral part of TPI's management team to assist with launching the network into a new broadcasting era in Indonesia."

Ishadi said his company would benefit from the cooperation with the 40-year-old Seven Network, which will become the host broadcaster for the Sydney 2000 Olympic games.

Minister of Information R. Hartono, who witnessed the signing yesterday, said the broadcasting law which was signed by President Soeharto on Sept. 29, allows broadcasting stations to cooperate with overseas stations for mutual symbioses. "Other stations intending to make similar plans must ask permission from the government."

Hartono said that under the new law, television stations were allowed to sell their shares to the public. "But they are still required to have government approval." (icn)