Telkom plans new bonds worth Rp 1-2 trillion

The Jakarta Post, Jakarta

State telecommunications firm PT Telkom Indonesia said it planned to issue bonds worth between Rp 1 trillion (about US$100 million) and Rp 2 trillion to finance investments in 2002.

Telkom's investor relations manager, Setiawan Sulistyono, said the proceeds from the bonds would be used to finance capital expenditures.

"Some of these (funds) will go into PMVIS," he said on Friday.

PMVIS stands for phone mobile view internet service, and is a relative new business segment Telkom has developed.

Setiawan said the "mobile" in PMVIS was no longer part of the program as Telkom had integrated its cellular business with a subsidiary, cellular operator PT Telkomsel.

The "view" in PMVIS is Telkom's cable television business.

In the first half of 2001, Telkom spent some Rp 900.30 billion on capital expenditures, of which Rp 454.19 billion was PMVIS related.

The other Rp 287.41 billion was spent on infrastructure development, and Rp 158.70 billion on supporting facilities.

Setiawan declined to detail Telkom's capital expenditure plans, and was unable to say when or where Telkom would issue the bonds. "It just depends on demand in the market."

Telkom's plan to enter the bond market underlines its need for cash while making ongoing compensation payments to partners with whom it has terminated telephone operating contracts.

The publicly listed state company must also raise funds to settle the buyout of a 35 percent stake in Telkomsel by state- owned international call operator PT Indosat.

Plans to swap the stake with Telkom's Divre IV, which operates its fixed-line assets in Central Java, ran aground on protests by Divre IV employees.