Murdoch buys 20 percent stake in 'ANTV'

Murdoch buys 20 percent stake in 'ANTV'

Chris Brummitt, Associated Press, Jakarta

Rupert Murdoch's Asian broadcaster will take a 20 percent stake in the Indonesian television network ANTV, officials announced on Friday, tapping into the country's competitive but expanding broadcasting market.

News Corp.'s Hong Kong-based satellite and cable operator Star TV and PT Cakrawala Andalas Televisi, or ANTV, declined to release financial details about the agreement apart from saying it was a "multimillion dollar deal."

International Herald Tribune quoted analysts on Friday's edition that the deal was likely to be well below US$20 million.

"This is proof that Indonesia is a good place to invest in and speaking frankly it means that dollars are coming in," said Anindya Bakrie, president director of ANTV, and son of Indonesia's Coordinating Minister for the Economy Aburizal Bakrie.

Star will control 20 percent of the company and Indonesian shareholders the remaining 80 percent stake, said Bakrie. Under Indonesian law, foreign companies can only a 20 percent stake in local media companies.

The deal will enable News Corp. to tap into Indonesia's 220 million population market and could reflect the company's strategic shift away from China, which up until recently has been the main focus of Star's Asian expansion.

"We are excited to be investing in Indonesia," Jannie Poon, a spokeswoman for Star, said at a joint press conference with Bakrie in Jakarta.

"We are confident this partnership will be fruitful and productive. We see ANTV to be a promising company."

Foreigners buying into local companies is a sensitive issue in Indonesia, and Poon sought to downplay concerns that the partnership would result in a big jump in foreign programs or a loss of jobs for locals.

"We see this as a partnership," she said.

"We can share know-how ... there will be a lot of exchanges. In other markets we see that people like local programming."

ANTV was launched on Jan. 1, 1993, as a local television station in Bandar Lampung, capital of Lampung province.

Later that same month the government licensed ANTV for nationwide broadcasting and the firm moved its headquarters to Jakarta.

The Asian financial crisis of 1997-1998 hit ANTV hard and forced the company to default on its foreign currency borrowings. Eventually it was able to negotiate debt rescheduling agreements with its creditors.

Indonesia now has 11 TV national stations, and many provincial broadcasters.

Bakrie predicted strong growth for ANTV and for Indonesia's broadcasting and advertising sectors in general despite the strong competition.

"The advertising cake is set to grow and the future is bright," he said.