Six state firms will be listed overseas

Six state firms will be listed overseas

JAKARTA (JP): The government plans to float the shares of six
state-owned companies through international stock markets to
raise funds as part of its program to accelerate the prepayment
of high-interest external loans, a minister said yesterday.

Minister of Finance Mar'ie Muhammad said that the public
offering of the six companies will include the divestment of the
government's shares.

"The public offering will include the divestment of around 25
percent of the government's shares and the issuance of around 15
percent of new shares of each of the six companies," the minister
told a hearing with the House of Representatives.

The minister explained that the government is also preparing
the listing of two other state-owned companies on the domestic
markets.

Mar'ie declined to disclose the names of the eight companies.

However, some of the companies, including PT Telekomunikasi
Indonesia, the provider of domestic telephone services, PT Aneka
Tambang, the general mining company, and PT Tambang Timah, the
tin mining company, have recently revealed their "going
international" plans.

Securities analysts said that at least two state-owned
companies, including the state-owned Bank Negara Indonesia and
the diversified Rajawali Nusantara, are also preparing their
public offering.

Unlike the six firms, the two latter companies will target the
local market, they said.

Time

The minister said the time frame of the planned initial public
offering of the eight state-owned firms had not been fixed. "It
depends on the market situation and the preparation of each
company," he added.

Securities analysts said that Telkom, which is now in the
process of selecting its underwriter, is likely to become the
second firm to be listed on the international market after
Indosat, which made a successful debut during its initial listing
on the New York Stock Exchange last October.

Indosat, the provider of international telecommunication
services, raised US$799 million from the sales of 25 percent of
its 1.03 billion shares through the New York Stock Exchange, in
addition to around Rp 650 billion ($297 million) from the sales
of another 10 percent of its shares on the domestic market.

The 25 percent of the shares sold through the New York Stock
Exchange mainly comprised of the government's shares, while those
sold at home consisted of new shares.

Mar'ie told the House's Budgetary Commission during the
hearing that around US$782.9 million of the proceeds of the
government's stock divestment in Indosat had been used to prepay
loans carrying interest rates of above 10 percent, provided by
the World Bank and the Asian Development Bank.

He said that the prepayment of the high-interest loans would
be made as an integral part of the foreign debt management and
that the divestment of the government's stocks in major state-
owned companies through stock exchanges will be one important
source of funds in financing its loan prepayment program.

The minister explained that around $916.08 million of the
outstanding debts carry annual interest rates of between 10
percent and 11.5 percent, while debts of $74.81 million have
interest rates of between 10.51 percent and 11 percent, and other
$160.65 million carries interest rates between 11 percent and
11.60 percent.(hen)