Telkom and Pramindo seal $425m buyout deal

The Jakarta Post, Jakarta

After more than ten months of negotiations, state-owned telecommunications company PT Telekomunikasi Indonesia (Telkom) said it had struck a buyout deal with its Sumatra joint operation scheme (KSO) partner PT Pramindo Ikat Nusantara.

"The buyout deal is valued at $425 million, including an $85 million debt takeover from Pramindo Ikat," Mursyid Amal told The Jakarta Post on Thursday.

According to Mursyid, Telkom will settle the payment in installment over two and a half years.

Telkom had previously announced that it had sealed a deal with Pramindo but embargoed the disclosure of the consideration until Feb.14.

The Pramindo Ikat buyout deal is the second for Telkom in its efforts to settle its disputes with its KSO partners. Last year, Telkom bought shares in PT Dayamitra Telekomunikasi, its partner responsible for the development of fixed line telecommunications in Kalimantan, for $122 million.

Meanwhile, officials from Pramindo Ikat could not be reached for comment on the deal.

A source at Pramindo Ikat said that the company would not give any comment until both parties officially signed a Memorandum of Understanding (MoU).

Pramindo Ikat is one of Telkom's five KSO partners. These were given the right by the government in 1995 to develop fixed line services in the country up until 2010.

The introduction of the telecommunications law that put an end to Telkom's monopoly in the industry has led to prolonged disputes with the KSO partners.