PT Telkom cuts its share issue
PT Telkom cuts its share issue
JAKARTA (JP): State-owned domestic telecommunications firm PT Telkom, which will conduct its local and overseas primary share offering tonight, yesterday cut its offering price and downsized its issue.
Telkom said in a statement last night that it had set the price of its shares at Rp 2,050 (90 U.S. cents) each on domestic markets and at US$18 per American Depository Share (ADS) on overseas markets.
The company initially set the maximum price at Rp 2,800 ($1.22) per share on domestic markets. Meanwhile, the price of its offered shares on offshore markets was estimated to range from $19.50 to $24.50 per ADS.
One ADS represents 20 ordinary shares.
Telkom also scaled down its offshore flotation by 57.1 percent to 30 million ADS from its initial allotment of 70 million ADS. However, it did not change the size of its domestic issue.
The company plans to make the primary offering of its shares on the London, New York, Jakarta and Surabaya stock exchanges simultaneously today.
The Jakarta and Surabaya stock exchanges will have a night trading session from 9:30 p.m. (14:30 GMT) until 11:30 p.m. (16:30 GMT) tonight to launch the debut at the same time as New York.
The state-run television station TVRI will broadcast nationwide Telkom's primary offering, believed to be Indonesia's largest public offering, live from New York and Jakarta.
Telkom said recently that its domestic offering of 1.16 billion shares, or 12.5 percent of its enlarged capital, was oversubscribed by 8.17 percent.
The government initially hoped to raise between $2.5 billion and $3.1 billion by offering 12.5 percent of its shares on the local markets and 15 percent on overseas markets.
Securities analysts speculated that the sudden cut in Telkom's issue was driven by overseas investor interest in the company's shares was "cold".
They said the fate of Telkom's listed upon their flotation tonight was likely to have an impact on the government's privatization plans for the future.
They added, however, that neither the government nor global the offering's coordinators could be blamed for the poor timing.
They said the market was still haunted by state-owned PT Tambang Timah, whose price fell some 17 percent from its initial offering price of Rp 2,900 ($1.30) after only five days of trading.
The Jakarta Stock Exchange's composite index hit a seven-month low yesterday, falling to 467.35 points, as compared with a 1995 high of 519.53 in August. (rid)