Indosat takes a beating in Alphanet fiasco
Indosat takes a beating in Alphanet fiasco
JAKARTA (JP): Indonesia's state-owned international
telecommunications firm PT Indosat is likely to lose much of its
C$50.75 million (US$40 million) investment in Canada's Alphanet
Telecommunication Inc following the later's bankruptcy
announcement on Monday.
Indosat president Tjahjono Soerjodibroto said on Tuesday that
the final calculation of the realized loss would still have to
wait for the sale of Alphanet's assets organized by
PriceWaterhouseCoopers Inc as the trustees.
"There will certainly be an impact. But we can't calculate
this yet as PriceWaterhouse is still working on selling off the
assets," he told reporters at a press conference.
Once the assets were sold, he said, the proceeds would be
first divided among creditors including Indosat which bought C$35
million in convertible bonds.
Indosat made the bond investment in August 1997 together with
a C$15.75 million equity investment, purchasing 1.75 million
shares (14.5 percent) of Alphanet.
The book value for the equity and bond investments totaled Rp
106 billion (US$40 million at the rate in August, 1997 or $12
million at the current rate), Tjahjono said.
Alphanet filed for bankruptcy due to the fact that the
corporation had been unable to secure the necessary financing to
enable it to continue operations.
Although Alphanet had received bids for its AlphaNet
Hospitality Systems Inc, it was realized that the proceeds from
this sale would not be sufficient to finance operations.
Tjahyono expected that Indosat's overseas investment loss
would not be detrimental to its privatization process.
The publicly-listed company is one of the state-owned
companies to be sold by the government this fiscal year ending in
March.
Indosat, which went public in 1994 and is now both listed on
the Jakarta and New York stock exchanges, is 65 percent
controlled by the government.
The government plans to further divest 14 percent of its stake
in the company to a foreign strategic investor.
Tjahjono said strategic investor candidates were expected to
give their final bids early next month.
State Minister for the Empowerment of State Enterprises Tanri
Abeng, however, said on Monday that the final bids were expected
next week.
Tjahjono declined to name the candidates, but Tanri said that
Australia's Telstra was among the serious contenders.
Tjahjono forecast a 3-9 percent growth in Indosat's 1999
traffic call volume, depending on the development in the
country's economic and political situations.
He said the ratio between incoming call volume and outgoing
call volume would remain the same as last year's 1.2 to 1.
The government raised international telecommunications rates
by between 4 and 50 percent in November due to the sharp
depreciation of the rupiah.
Tjahjono said he did not expect a further increase in the
rates as long as the local unit remained stable.
Indosat announced last week that its net profit had soared to
Rp 1.16 trillion in 1998, compared to Rp 640.8 billion in 1997,
and its total revenue rose by 44 percent to Rp 2.1 trillion from
Rp 1.45 trillion. (rei)