Indosat hopes to buy Satelindo stake for $340m
Indosat hopes to buy Satelindo stake for $340m
The Jakarta Post, Jakarta
State-owned telecommunications firm PT Indosat is close to
reaching a deal with Germany's Deutsche Telekom to buy the
latter's 25 percent stake in local cellular operator PT Satelindo
for about US$340 million, according to a minister.
"The price is around $340 million, but it can still change.
Nothing is finalized," State Minister of State Enterprises
Laksamana Sukardi told reporters following a Cabinet meeting.
"(The final deal) is expected soon," he added.
He did not provide details.
The government initially offered around $200 million for the
25 percent stake, but Deutsche Telkom, which is under pressure to
sell assets in the region due to plunging profits, wanted $400
million, reports said.
The government wants Indosat to acquire the Satelindo stake to
increase its value before the government sell its shares as part
of this year's privatization program.
Indosat already owns a controlling 75 percent stake in
Satelindo, the country's second largest cellular operator.
The publicly listed Indosat is mulling various options for
financing the acquisition, including a rights issue, bond issue
or bank borrowing.
A rights issue means issuing more shares to allow Indosat
to raise funds from the stock market. There is no clear timetable
for the rights issue, but the government hopes to finalize it
before June, when the first stage of Indosat's share sale takes
place.
The government owns a 65 percent stake in Indosat, with a 45
percent stake to be sold this year through a two-step process.
The first divestment is scheduled for June, when the
government will release a 15 percent stake through the stock
market.
The remaining 30 percent will be sold in October to strategic
investors.
The country's cellular phone industry has been rapidly
growing. Thus raising its stake in Satelindo would help boost
Indosat's earnings, which would in turn make it a more attractive
investment.
Satelindo had some 1.9 million customers as of the end of last
year, and is targeting to raise its customer base to three
million.
Analysts, however, said the downside was the huge debt burden
of Satelindo.