Indosat ready to go ahead with divestment

Indosat ready to go ahead with divestment

JAKARTA (JP): Publicly listed international telephone operator
PT Indosat said on Wednesday it was optimistic it would be able
to meet the government's requirement to divest of its holdings in
at least two non-core businesses by the end of this year.

Company operations and technical director Garuda Sugardo said
the company was close to finalizing its immediate divestment plan
and had figured out which of its dozens of subsidiaries would be
given up. He declined, however, to name the firms.

"We'll be ready to divest of our ownership in the non-core or
nonprofitable subsidiaries, as required by the government, on
time. Right now, we're still finalizing the plan and talks," he
said on the sidelines of a telecoms seminar.

He indicated that Indosat would also be ready to give up its
shares in some subsidiaries in which the other state telecoms
company, PT Telkom, also held shares.

Together with Telkom, Indosat has invested in at least eight
similar companies: VSAT and banking network applications provider
Lintasarta, telecommunications consultantcy firm Bangtelindo,
VSAT operator and maintenance provider for the oil industry
Patrakomindo, personal communications network provider Primasel,
mobile phone operator Telkomsel and another mobile phone operator
which also provides an international direct dial service,
Satelindo.

Indosat also holds stakes in PT Mitra Global Telekomunikasi
Indonesia (MGTI) (30.55 percent) and PT Pramindo Ikat Nusantara
(13 percent), which are partners with Telkom in its Joint
Cooperation Scheme (KSO) projects.

Garuda said Indosat and Telkom were currently undertaking
intensive talks on the possibility of each firm divesting of
stakes in Telkomsel, in which Indosat had a 35 percent stake.

He refused to disclose Indosat's stance toward the three
companies.

"That'll very much depend on the scale of each other's bids,"
Garuda said, adding that in the case of Pramindo and MGTI, it was
now Telkom's call to make the bid.

The government recently called on Indosat to give up its
stakes in Pramindo and MGTI because the two firms have closer
business ties with Telkom, rather than Indosat.

Sources said Indosat might be willing to give up its ownership
in Pramindo and MGTI, but would fight hard for Telkomsel, which
is known as the biggest and most profitable cellular operator.

Indosat and Telkom have invested in many telecoms-related
companies because in the past the law required other companies to
collaborate with them, especially Telkom, if they were to enter
the country's telecommunications industry.

According to Garuda, Indosat currently has about 30
subsidiaries, including a Malaysia-based corporate telecoms
provider, Acasia Communications; Singapore-based submarine cable
repair firm ASEAN Cableship Pte. Ltd.; satellite-based
broadcasting and multimedia operator Datakom Asia; satellite-
based telecoms provider ICO Global Communication; e-commerce
provider Indokomsat Lintas Dunia; satellite-based multimedia
service provider Multi Media Asia Indonesia; broadband network
and content provider Multimedia Nusantara; and multimedia
investment holding firm Indosat Mega Media. (cst)