Satelindo to launch IPO mid-2002

The Jakarta Post, Jakarta

Cellular operator PT Satelindo will float its shares via an initial public offering (IPO) by the middle of next year and was expected to earn US$75 million in cash to help finance the expansion of its network, a senior official said on Wednesday.

Budi Prasetyo, director of operations at Satelindo's parent company PT Indosat, said that the funds were needed to upgrade Satelindo's services and increase competitiveness.

Under a $430 million debt restructuring agreement with its creditors last year, Satelindo was not allowed to invest more than $50 million a year, causing the company to lag behind its competitors, Reuters reported.

Budi said, however, that the planned IPO would depend largely on market conditions, and if the plan fell through, Satelindo would choose between offering its shares to certain institutions or an equity injection by Indosat of at least $75 million.

Whatever option it takes, it must be settled before July when some of Satelindo's debts mature, Budi said.

Indosat owns 75 percent of Satelindo and the remainder is owned by Deutsche Telekom. Both parties had agreed to put more money into Satelindo if needed, or let their capital be diluted from a fresh capital injection.

Satelindo, Indonesia's second largest cellular operator, has more than 1.5 million subscribers and is targeting three million subscribers in 2002.