Indosat to float 25 percent of its shares in October

Indosat to float 25 percent of its shares in October

JAKARTA (JP): The state-owned international telecommunications
operator, PT Indosat, will list 25 percent of its shares on the
New York Stock Exchange (NYSE) on Oct. 18 and on both the Jakarta
and Surabaya Stock Exchanges on Oct. 19.

Indosat's president Tjahjono Soerjodibroto told a press
conference, after the company's presentation, that the offered
shares will carry a nominal value of Rp 500 (23 U.S. cents) each,
which will be half the usual nominal value of all the shares
listed on the two domestic exchanges.

He said the low price was aimed at encouraging more small
investors to buy shares.

In yesterday's press conference, which was closed to foreign
reporters, Tjahjono also said that after the public offering the
government will still hold "golden shares" besides 65 percent of
the total common stock.

By holding the golden shares, he said, the government has veto
rights in appointing the boards of directors and commissioners
and changing the company's statutes.

He added that the golden shares could not be handed over to
other parties.

Tjahjono declined to elaborate on the prices of the offered
shares, the amount of the shares to be floated both on
international and domestic capital markets or the targeted
revenues from the public offering.

"They will be disclosed on the listing date," he said. He
added that the NYSE does not allow the company to disclose the
normal data usually published by the domestic companies which
wish to go public.

He added that the proceeds from the public offering will be
used to finance several projects in connection with the company's
business expansion.

According to Tjahjono, the company's expansion projects in the
next five years will likely to absorb some Rp 1.3 trillion
($596.88 million) in funds.

The government had earlier appointed Merrill Lynch of the
United States as Indosat's lead underwriter for overseas share
sales and the state-owned PT Danareksa Sekuritas for domestic
sales. Merrill also assisted the government when acquiring
Indosat from ITT, which cost Rp 24 billion in 1981.

Meanwhile, Danareksa's president Rustam Effendi said that
Indosat will also hold public expose in Surabaya, Semarang,
Bandung and Medan.

Road show

He said that the company's overseas road show, scheduled to
start on Sept. 26, will include cities of Singapore, Hong Kong,
Tokyo, San Francisco, Los Angeles, Chicago, Boston, Edinburgh,
Paris, Zurich, Geneva, Frankfurt and London.

The company's net profits increased steadily from Rp 208.5
billion in 1991 and Rp 237.3 billion in 1992 to Rp 251.5 billion
in 1993. The company took in Rp 127.6 billion in net profits in
the first six month of this year.

The company's total sales also increased from Rp 573.2 billion
in 1991 and Rp 690.9 billion in 1992 to Rp 765.2 billion in 1993.
The company posted Rp 186 billion in total sales in the first six
months of this year.

The company's assets totaled at Rp 789.1 billion as of June
1994.

Indosat's businesses include international telegram, telex and
call services plus data packaging connecting. The company also
joins in the businesses of ASEAN Cableship, International
Satellite Corporation (intelsat) and International Maritime
Satellite (Inmarsat). The company has undertaken several
telecommunications projects in the Southeast Asian nations as
well.

Indosat's general manager of business and services
development, Rudiantara, said that his company has recently won a
telephone network project in Cambodia.

He said that the contract will include the development of
Cambodia's domestic telephone network and the renovation of
cellular network.

He said that there were seven companies participating in the
tender which included Telstra of Australia, France Telecom,
Detecom of Germany, Korea Telecom and two Thai companies
Shinawatra and CP Group.

He also said that Indosat will establish a consortium with the
Cambodian government to refurbish the infrastructure. The
original network in the country was jointly installed by Telstra
and Indosat at $29 million, he said.

"The current value may be doubled," he said.

Cambodia reportedly needs about 10,000 telephone lines as
their telecommunications facilities are in disrepair throughout
the country. The damage is reportedly due to theft, vandalism and
a lack of technical expertise in maintenance since the withdrawal
of U.N. peacekeepers in November 1993. (icn/05)