Satelindo to issue debt instruments later this year

JAKARTA (JP): Telecommunication firm PT Satelindo is expected to issue debt instruments later this year to generate additional funds required to finance its operations, a company executive says.

"We will issue some capital market instruments in November to fund our projects," Satelindo's president, Iwa Sewaka, told the House of Representatives' Commission V, which oversees communications, in a hearing yesterday.

Iwa, however, did not mention what the instruments were or any other details related to the plan.

He only said that the instruments will be offered through several markets, including the New York Stock Exchange.

The offering, he said, will serve as a "warm-up" for Satelindo's plan to float its shares on international capital markets in the next three years.

Satelindo is 45 percent owned by a subsidiary of the Bimantara Group, a conglomerate chaired by one of President Soeharto's sons, 25 percent by DeteMobil, a subsidiary of Deutsche Telekom, 22.5 percent by PT Telkom and 7.5 percent by PT Indosat. Both Telkom and Indosat are state-owned concerns.

Iwa also said that Satelindo needs to exercise the issuance even though the company in March acquired US$586 million from DeteMobil through a direct-placement transaction.

"Satelindo's investments in 1995 will rapidly increase because we are planning to realize all of the infrastructure projects within one year, although we previously planned to finish them within three years," he said.

The projects are required to support Satelindo's business in the Global System for Mobile (GSM) cellular telephones, Iwa added.

In the near future, Satelindo, Indonesia's only existing GSM operator, is expected to encounter competition from two companies: PT Telkomsel which is controlled by Telkom and Indosat, and PT Rajasa Hazanah Perkasa, which is yet to be formally incorporated for GSM business.

Official sources said Rajasa is made up of a local company controlled by businessman Hutama Mandala Putra and the U.S. based Bell Atlantic.

Satellite

At yesterday's hearing, Iwa also clarified Satelindo's position regarding the selection of the launcher of its Palapa C- 1 satellite, which was incorrectly reported yesterday.

He said that Martin Marietta of the U.S. has been chosen, without a tender process, to launch the satellite by using the Atlas IIAs rocket from Cape Canaveral in Florida next January.

The Palapa C-1 was originally set for launch by the French- based Arianespace between August and November but was postponed due to failed launches which then delayed launching schedules.

Arianespace will launch the Palapa C-2 satellite from the Korou base in French Guiana in April next year.

"The delay should not affect the satellite's users," Iwa said.(hdj)