Investors important in Indosat bidding

The Jakarta Post, Jakarta

The government is placing the quality of the investors as well as their price offers on an equal footing for the bidding of a 41 percent stake in state-owned telecommunications company PT Indosat.

State Minister for State Enterprises Laksamana Sukardi said on Monday that aside from the price, the added value that investors could generate for Indosat was also important.

"We will give the price, the investor and the sales and purchase agreement equal weighting," Laksamana said following a hearing with the House of Representatives Commission V for industry and trade affairs.

He said that he expected more input on the bidding criteria from the government's financial advisors, state-owned brokerage firm PT Danareksa Sekuritas and Credit Suisse First Boston (Singapore) Ltd.

The government owns a 56.9 percent stake in the publicly listed Indosat, having sold an 8.1 percent share for US$110 million earlier in May.

Laksamana said he expected the future investor would improve Indosat's performance and put the company on the global map.

"A telecommunications company with a foreign network would make Indosat part of a more global network and this is added value."

Indonesia plans to sell off Indosat this month, hoping the 41 percent will cover most of the Rp 3.9 trillion (about $433 million) it aims to raise from this year's privatization program.

About Rp 2.26 trillion has been raised through this program so far. The proceeds program is earmarked to help finance the country's state budget deficit of an estimated Rp 42 trillion this year.

"There are three bidders who appear serious," Laksamana said, adding that they were all foreign.

Interest in Indosat has risen since it ended a cross-ownership deal with state-owned telecommunications company PT Telkom Indonesia last year.

The move landed Indosat a 75 percent stake in cellular phone operator PT Satelindo, boosting its foothold in the country's thriving cellular market.

It purchased the remaining 25 percent stake from Germany's Deutsche Telekom in a deal worth $325 million last June.

Indosat, which remains the only international call operator until next year, also entered the local call market in August as part of the government's plan to open up the telecommunications sector.