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)