JIHD to acquire 21.3% stake in PT Satelindo
JAKARTA (JP): A publicly-listed property developer, PT Jakarta International Hotel & Development (JIHD), announced yesterday it is to acquire a 21.3 percent stake in PT Satelindo, a private telecommunications operator, for Rp 921.9 billion (US$400 million).
"We have to do something to boost our performance and we believe that telecommunications is a promising sector which will help stabilize and increase our earnings," JIHD director Budiman Effendy said.
Budiman said that JIHD needs a new source of revenue because the company presently cannot earn anything from its Borobudur Hotel in Jakarta because it is being renovated.
The acquisition, according to Budiman, will allow JIHD to take a 21.3 percent share of Satelindo's profits this year.
"It is for the benefit of our company. We have no other intention behind the acquisition," Budiman noted.
He also denied an assumption that Satelindo's share valuation is too high.
"The proposed acquisition price represents approximately 75 percent of the price level valued by CIBA, an independent Hong Kong share appraiser, meaning that we get a 25 percent discount. The price also represents a 20 percent discount, compared to the price for a major foreign telecommunication operator in March last year," he argued.
He said that an independent financial advisor, Lazard Asia Ltd., has also said that the proposed acquisition price is fair.
Budiman said that because the acquisition will be done indirectly, it will not change the composition of Satelindo's stockholders.
"We will buy all the shares owned by Bright Eagles Securities Ltd., which owns 95 percent of the shares in PT Graha Jakarta Sentosa," he said. "Graha Jakarta owns 50 percent of the shares of PT Bimagraha, which holds 45 percent of the shares in Satelindo."
Bright Eagles' 95 percent ownership in Graha Jakarta is equivalent to 21.3 percent of the shares in Satelindo.
He said that Satelindo is presently 45 percent owned by Bimagraha, 25 percent by DeTeMobile, 22.5 by PT Telkom and 7.5 percent by PT Indosat.
Besides Graha Jakarta, Bimagraha is 50 percent owned by Bimantara.
Budiman said that JIHD will issue three new shares for each two old shares at Rp 1,475 each to raise funds of Rp 854 billion.
Out of the funds, Rp 831 billion will be used to finance the acquisition of the Satelindo shares and the remaining Rp 23 billion to strengthen its working capital.
He also said that the remaining Rp 91 billion for the acquisition will be paid with shares in PT Graha Putra Nusa, a subsidiary of JIHD, which owns a plot of land in the Sudirman Central Business District in South Jakarta.
Rights issue
He explained that JIHD has appointed PT Schroders Indonesia to arrange the rights issue. But JHID founders, Tommy Winata and Sugianto Kusuma, will act as underwriters.
The planned acquisition, according to Budiman, is subject to approval from minority shareholders, as required by a capital market regulation because it contains conflicts of interest.
He said that a director of JIHD, Sugianto Kusuma, is also a director of Bright Eagles which is owned by Kwok Thai Hwa.
"We hope that minority shareholders will give their approval at an extraordinary shareholders meeting to be held on May 30," he said.
JHID is 37 percent owned by private investors, while Tommy Winata and Sugianto Kusuma control the company with a combined 48 percent ownership. The other shareholders are PT Danareksa, the government, PT Perhotelan dan Perkantoran Indonesia and PT Astek. (08)