Telkom injects more equity into Telkomsel

Telkom injects more equity into Telkomsel

JAKARTA (JP): The state-owned domestic telecommunications
provider PT Telkom will have to provide an additional payment of
US$109 million to maintain its equity participation in PT
Telkomsel at the level of 42.72 percent, said an executive.

Telkom's president, Setyanto P. Santosa, said that the payment
to Telkomsel, a global system of mobile communications (GSM)
operator, will be taken from the funds raised by Telkom from the
floating of part of its shares on the New York, London, Jakarta
and Surabaya stock exchanges last November.

Telkomsel was established in 1995 as the country's second GSM
operator by Telkom (with the share ownership of 51 percent) and
PT Indosat (49 percent).

The participation of PTT Telecom Netherlands and Setdco Group
in Telkomsel under agreements signed here Monday night should
dilute Telkom's stake to 39 percent.

PTT Telecom Netherlands and Setdco will pay $333 million and
$96.4 million respectively for their acquisition of Telkomsel
shares.

Setyanto said Monday night that Telkom will have to pay
another $109 million because it wants to raise its stake to 42.72
percent, while its assets have been revalued.

Telkom put Rp 130.5 billion for its first equity participation
in Telkomsel at its establishment in 1995.

Telkomsel, therefore, will be 42.72 percent owned by Telkom,
35 percent by Indosat, 17.28 percent by PTT Telecom Netherlands
and 5 percent by Setdco Group.

Chairman of Setdco Group, Setiawan Djody, told reporters that
he plans to increase ownership in Telkomsel up to 25 percent in
the future.

"I'm sure that GSM has a bright future in Indonesia,
especially because the business is run by Telkomsel which is by
supported Telkom and Indosat, two companies listed on the New
York Stock Exchange."

"Setdco proposed for the first time to buy up to 10 percent of
Telkomsel's shares. But the government just allows us to have 5
percent. We plan to have more shares," he said.

Telkomsel's commercial director, Rudiantara, said that share
acquisition would be possible with approval from shareholders.

Meanwhile, Setyanto also said that one of its subsidiaries, PT
Pasifik Satelit Nusantara (PSN), planned to float its shares on a
U.S. capital market later this year.

He said that PSN, the country's first private
telecommunications operator, was currently preparing for an
initial public offering on the Nasdaq capital market in the
United States, besides domestic stock exchanges.

Setyanto, who is also PSN's chief commissioner, refused to
provide further details.

PSN is a joint venture company between several overseas and
domestic firms, including Telkom which controls a 25.85 percent
stake.

According to Telkom's prospectus, other domestic shareholders
of PSN include PT Elektrindo Nusantara, PT Primaupaya Lintaswara,
PT Skeisnetindo Teknotama and PT Multi Prima Abadi. The three
foreign shareholders comprises Hughes Communications and Quoin
Financial Corporation of the United States and Telesat Canada.

PSN, set up in 1991, provides satellite-based communication
services within Asia using a satellite previously owned by
Telkom. Joining forces with PLDT Co. of the Philippines and
Jasmine International Public Co. Ltd. of Thailand, PSN has also
set up ACeS, a cellular telecommunications provider using four
satellites, called Garuda, which will begin operation within in
two years.

PSN, which owns six extended-C band transponders on the 34-
transponder Palapa-C1 satellite, also operates a
telecommunications facility in Batam, Riau. (icn)