Merpati rues privatization delay
Rendi A. Witular and Tony Hotland, The Jakarta Post/Jakarta
State-owned carrier PT Merpati Nusantara Airlines said it regretted the government's decision to delay the privatization of the airline, which it warned could leave Merpati behind its competitors amid growing competition in the industry.
"The government doesn't want to push the House of Representatives (to approve) the privatization plan because it is feared that such an action could prompt unwanted suspicion, as the end of the current government's tenure is drawing near," Merpati president Hotasi Nababan said on Friday.
The House must approve all sales of state-owned enterprises.
"We really regret this delay because we need fresh funds for our expansion. Otherwise, we'll be left behind both by our domestic and international competitors," Hotasi said.
The government recently decided to delay the sale of shares in a number of state-owned enterprises for the remainder of this year.
It said the delay was due to the limited time left for the current administration to conduct the sales.
Current House members will hold their last session on Sept. 30. The country is also preparing for the presidential runoff on Sept. 20. The incumbent government will leave office starting Oct. 10 and a new one will be sworn in on Oct. 20.
Merpati asked the House for permission to privatize in May, but lawmakers demanded the company restructure its finances first to avoid a low sales price.
Merpati currently has Rp 1.3 trillion (US$139.93 million) in debts, with assets standing at Rp 800 billion.
The airline is trying to speed up the conversion of its Rp 225 billion debt to the government into equity, and is in talks with other creditors, such as Bank Mandiri and national flag carrier Garuda Indonesia, to convert their credits.
Merpati owes Rp 230 billion to Bank Mandiri and Rp 246.7 billion to Garuda Indonesia.
"We've asked them to convert the debts into equity and we are waiting for their response. As for the government, it has agreed to do so and the Ministry of Finance is now recalculating the debt," Merpati corporate secretary Jaka Pujiyono told The Jakarta Post.
Jaka said Merpati had also short-listed three financial advisers for the privatization plan, and would submit the three names to the government soon.
Merpati had planned to sell shares through a private placement to strategic investors before the end of the year, with an initial public offering next year.