Indosat hands over $800m to govt from shares sales

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)