PT Telkom mulls trimming stake in Satelindo

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)