Indosat hands over $800m to govt from shares sales

JAKARTA (JP): Minister for Tourism, Post and Telecommunications Joop Ave said yesterday that around US$800 million of the funds raised from the sales of the state-owned Indosat's shares would go into the state coffers.

"The remaining Rp 650 billion (US$297 million) will be used by Indosat to finance the construction of its new telecommunication facilities," Joop told newsmen following his meeting with President Soeharto.

The $800 million will be used either to finance government development projects or to repay its foreign loans, Joop said, adding that the remaining Rp 650 billion will be solely managed by Indosat's executives.

Indosat, a government owned company, recently sold around 25 percent of its total 1.03 billion ordinary shares to overseas investors and another 10 percent to local investors.

Joop said that the 25 percent of shares sold to foreign investors mainly comprised of the government's stocks.

"It is the government's stake and it therefore deserves to use the proceeds for development purposes," he said, adding that the 10 percent shares sold to local investors comprised of new shares and that the proceeds should, therefore, go to Indosat's coffers.

Indosat's shares, which are cross-listed on the Jakarta, Surabaya and New York Stock Exchange (NYSE), received a strong response from both local and foreign investors during their primary offering early this month.

Joop said the company's share offering on the overseas market, which was coordinated by Merrill Lynch, a major securities company in the United States, was oversubscribed fourfold while the sales in the local market, lead-managed by the state-owned Danareksa Securities, were oversubscribed twofold.

The company, the provider of international telecommunication services, booked a gain of around 16 percent during its initial listing on the NYSE and almost 20 percent on the Jakarta Stock Exchange. (hen)