PT Telkom mulls trimming stake in Satelindo

JAKARTA (JP): State-owned telecommunications company PT Telkom is considering divesting part of its 22.5 percent stake in subsidiary Satelindo, company president A.A. Nasution said on Wednesday.

"It is part of the restructuring plan to focus Telkom's activities on its core business as the provider of local telecommunications services," he said.

A Telkom executive who spoke on the condition of anonymity said the firm was mulling divesting most of its stake in Satelindo.

He said Telkom would become a minority shareholder with a retained holding of about 2 percent.

Satelindo, a joint venture established in January 1993, is owned by Telkom (22.5 percent), another state-owned telecommunications company, PT Indosat, (7.5 percent), local private company PT Bimagraha Telekomindo (45 percent) and a subsidiary of German Deutshce Telekom, DeTeMobil Telekom Mobilfunk GmbH (25 percent).

Indosat earlier said it planned to sell 6.5 percent of its 7.5 percent stake in Satelindo but was still looking for a suitable buyer.

Telkom is negotiating to sell its stake to DeTeMobil, the source said.

"If the negotiations proceed well, DeTeMobil may buy Telkom's stake. DeTeMobil earlier considered buying Bimagraha's stake but the negotiations reportedly stalled because they could not agree on the price."

He said Telkom planned to use the proceeds from the divestment in Satelindo to raise its stake in another subsidiary, cellular operator Telkomsel.

Telkom's 42.7 percent stake already makes it the largest shareholder in Telkomsel. The other shareholders are Indosat (35 percent), PTT Netherlands (17.28 percent) and local private company PT Sedtco Megacel (5 percent).

The source did not disclose from which other shareholder Telkom planned to up its stake.

He dismissed rumors that Telkom's plan to increase its stake in Telkomsel was part of the company's strategy to compete with Indosat in expanding control of cellular operators.

Indosat previously said it was negotiating to acquire a stake in another cellular operator, PT Excelcomindo Pratama.

Nasution said Telkom's restructuring program of its subsidiaries was made in line with the government's privatization plan for several state-owned companies, including Telkom.

Telkom is among the firms set for privatization in the 1999/2000 fiscal year which ends in March.

The government divested another 9.2 percent in Telkom in May, reducing its stake in the company to 66 percent.

State Minister of the Empowerment of State Enterprises Tanri Abeng recently said the government would further reduce its stake in Telkom this fiscal year.

But Nasution said that Telkom would ask the government to delay its divestment plan to 2001, arguing that current market conditions were not conducive for the sale.

"We believe it (the privatization) will be more successful and profitable if it is conducted in 2001 when the country's economic condition has better recovered."

He recommended that the government keep its position as Telkom's dominant shareholder and shun foreign strategic partners in the privatization program.

"Are you asking what does Telkom really want? We want to keep Telkom as a native-controlled company because we have great human resources who are as capable and professional as any foreign experts," he said. (cst)