PT Gas Negara aiming for Rp 90 billion net profit

JAKARTA (JP): The state-owned PT Perusahaan Gas Negara (PGN), recently changing its legal status to a limited liability company with a commercial mission, forecast a net profit of Rp 90 billion (US$38.96 million) this year.

"With our new legal status and business increasing, we expect to reach a net profit of about Rp 90 billion this year," the company's president, Qoyum Tjandranegara, told reporters after a ceremony for the installation of company directors and commissioners yesterday.

Qoyum noted that last year, his company saw its net profit increase by 20 percent to Rp 78 billion, derived mostly from its operation in the greater Jakarta area.

He said PGN is currently making preparations to go public in early 1998. As part of the preparations, the company will soon set up three subsidiaries: PT Transmisi, PT Distribusi and PT Co- Generation.

Transmisi will specialize in piping gas to distribution centers and Distribusi will be in charge of distributing gas to households and industrial users. Co-Generation will handle the diversification of gas usage, including the development of small- scale, gas-fired power plants and high-rise buildings.

He said PGN will eventually function as a holding company, dealing only with investments and infrastructure developments.

"By changing its legal status, any private company can now join the state company in the gas business," he said.

Qoyum said PGN has appointed Rothschild Ltd of Singapore as its financial advisor in a tendering process to choose two investors to become strategic partners of Transmisi.

"We're offering a 40 percent stake of Transmisi to other investors," he said, adding that 11 foreign companies are participating in the tendering process for the stake.

Among the 11 foreign companies are British Gas of Britain, Enron of the United States, Gas du France (France), Vital Gas (Italy) and Trans Canada (Canada).

"From this direct placement, we expect to get between $250 million and $350 million in fresh funds from the strategic partners to help finance our new projects in Sumatra," Qoyum said.

He said PGN will build an 800-km gas pipeline connecting the Asamera gas field in Jambi province with Batam in Riau.

To finance the project, expected to cost $600 million, PGN has acquired soft loans from the Asian Development Bank, Japan Exim Bank and European Investment Bank.

The directors installed yesterday included Qoyum as president, Rohali Sani as director of techniques, Nursubagjo Prijono as director of development, W.M.P. Simanjuntak as director of finance and Supardjono Karimun as director of general affairs.

The company's new board of commissioners is headed by Soepraptomo Soelaiman. (13)