Telkom allocates 23% of net profit for dividends

JAKARTA (JP): PT Telekomunikasi Indonesia (Telkom), the state- owned telecommunications company which will go public next month, will allocate 23 percent of this year's net profit as dividends for its shareholders, the firm's president said.

"Telkom expects to get a net profit of Rp 828 billion (US$363.5 million) this year from its projected sales revenues of Rp 5.03 trillion ($2.2 billion)," Setyanto Prawira Santosa said yesterday in his presentation on the company's plan to sell part of its shares to the public.

The presentation, attended by 1,500 prospective buyers as well as members of the House of Representatives, was the company's first domestic "roadshow" for its privatization program. The show will continue on to the capitals of North Sumatra and East, Central and West Java.

Telkom will likely list 25 percent of its shares on the New York and London stock exchanges and another 10 percent on the domestic stock exchanges. The shares will also be offered in Tokyo without being listed there.

Setyanto said that the company will increase the dividend portion to 30 percent until 1999.

Setyanto said Telkom is encouraging Indonesian citizens to buy its shares by offering them up to 50 incentive shares and up to 500 for cooperatives on the condition that they keep the shares for at least one year.

"The condition is aimed at encouraging people to gain benefits from their long term investments in the promising company," he said.

The incentive shares will be taken from the government's equity in the company, he said.

He said 2.7 million current telephone subscribers in the country are expected to buy the company's shares, thereby increasing the number of investors on the local stock market from its present level of 200,000.

However, the chief executive of the state-owned investment trust company PT Danareksa Sekuritas, Agus Projosasmito, told reporters that Telkom cannot force people to hold on to their shares for so long.

Illiquid

"We cannot force them all to hold the shares for one year because it will make the shares illiquid," said Agus.

According to Setyanto, 39.2 percent of the funds to be obtained from the share issuance will be used to increase the capacity of the company's telephone networks, 39.5 percent to update the technologies of Telkom's facilities and 21.3 percent to diversify products as well as to improve its information systems.

Two other state-owned companies, PT Indosat and PT Tambang Timah, have offered 25 percent of their shares on overseas stock exchanges and another 10 percent on the local markets.

Setyanto said Telkom's total assets are expected to increase from Rp 11.74 trillion as of the end of last year to Rp 15.6 trillion by the end of this year.(kod)