Telkom to finish Ariawest buyout

Telkom to finish Ariawest buyout

JAKARTA: PT Telekomunikasi Indonesia aims to finalize this week plans to pay US$390 million to take over a telecom company partly owned by AT&T Corp of the U.S.

The company, PT Ariawest International, has been at loggerheads with state-owned Telkom over a revenue-sharing pact which soured after the 1997-98 Asian financial crisis.

Telkom will pay $120 million for Ariawest's assets and take over $270 million worth of debt over five-and-a-half years, a source involved in the deal told Dow Jones Newswires.

"Payments will be made every six months," said the source, who spoke on condition of anonymity.

Ariawest began offering local call services in West Java in the mid 1900s in one of five agreements between Telkom and various foreign-led joint ventures. Telkom, which until this year had a monopoly on local call services, took 30 percent of revenues from these joint ventures, locally known as KSOs, in return for allowing the companies exclusive rights to build and operate fixed lines. -- Dow Jones