Tanri insists on high price tag for Indosat

Tanri insists on high price tag for Indosat

JAKARTA (JP): State Minister of the Empowerment of State Enterprises Tanri Abeng reaffirmed on Thursday that the government would sell another 5 percent stake in publicly listed state international telecommunications provider PT Indosat when the price was right.

"We want to get the best price," he announced after a meeting with senior economic ministers.

"So the timing (for the divestment) is very important," he added.

Tanri explained that the decision of when to make the divestment was tricky due to the limited tendering period.

"We can only make the tender after the local stock market closes and before the New York Stock Exchange opens," he pointed out.

Indosat is listed on both the Jakarta and New York stock exchanges.

The government currently controls 65 percent of Indosat. It sold 35 percent of its shares in 1994 through an initial public offering in both Jakarta and New York.

The government plans to divest 5 percent of its shares in a bid to raise cash to help finance the 1999/2000 state budget.

The Jakarta market soared to a 22-month high of 686.94 on Tuesday following the country's peaceful landmark general election the previous day.

But the government did not manage to sell its 5 percent Indosat shares then.

The market euphoria subsided on Wednesday, with the Jakarta Stock Exchange index dipping 1.4 percent, causing Indosat shares to drop Rp 1,600 to Rp 17,100.

The market fell by 2.1 percent on Thursday, but Indosat's share price managed to increase Rp 300 to Rp 17,400.

Tanri said earlier that the government planned to discount its Indosat shares by between 3 percent to 5 percent from the market price.

Tanri said the government also planned to sell shares to strategic partners at a premium.

The government was expected to sell more than a 5 percent stake to a strategic partner.

But the entry of foreign strategic partners would only be realized after the revision of the country's telecommunications law, which is expected to be approved by the House of Representatives later this year.

According to the existing law, the government must retain a 51 percent share in the telecommunications company.

Several international telecom giants including Australia's Telstra, France's Telecom and British Telecommunications have expressed interest in becoming Indosat's strategic partner. (rei)