Telkom to float shares on overseas marts
Telkom to float shares on overseas marts
JAKARTA (JP): PT Telekomunikasi Indonesia (Telkom) will make its capital market debut this year in anticipation of the competition posed by state-owned telecommunications companies from other developing countries.
Minister of Tourism, Post and Telecommunications Joop Ave confirmed Telkom's plans for an initial public offering (IPO) yesterday, making it the second state company to go international after PT Indosat.
Joop, however, said that the government has yet to decide where the company will be listed or how much is expected to be raised by the public offering.
"Telkom might follow Indosat's appearance on the New York Stock Exchange," he announced after meeting with President Soeharto.
Joop, accompanied by Jonathan Parapak and Djakaria, respectively the secretary general and director general of the Ministry of Tourism, Post and Telecommunications, was briefing the President on Telkom's IPO plan and the preparations being made for the launching of the C1 and C2 Palapa satellites.
The minister said that the government is now selecting a global coordinator for the sale of Telkom's shares.
"A number of the world's major securities companies recently took part in the 'beauty contest' for the global coordinator of Telkom's public offering, but no decision has been made about the winner," he said.
All of the securities companies taking part in the so-called beauty contest, recalled Joop, suggested that the government commence Telkom's IPO plan this year to avoid the sharp competition coming from state-owned companies from other developing countries.
At least eight developing countries are now preparing overseas listings for their state-owned companies, he added.
Indosat, the provider of international telecommunication services, was successful in its initial listing on the New York Stock Exchange (NYSE) late last year.
The success of Indosat's simultaneous listing on the Jakarta and New York stock exchanges has been hailed by leading financial publications around the world. Asiamoney named Indosat the Deal of the Year. International Financing Review awarded it Best Asian Equity Deal of the Year while Euroweek's Asian capital markets poll listed the company as the Best Asian Equity Issue and the Best Privatization Equity Issue of 1994.
Response
Joop said that Telkom, the provider of domestic telecommunication services, expects to receive a similar response from investors given its large-scale businesses.
Minister of Finance Mar'ie Muhammad said recently that Telkom is one of six state-owned telecommunications firms to be listed on foreign stock markets.
Which six companies will "go international" has not been made public but sources are hinting at PT Timah, the tin mining firm, PT Aneka Tambang, the general mining company and PT Jasa Marga, the toll road operator as possible candidates.
Mar'ie said that like Indosat, the public offering of those companies would also involve the divestment of government shares and the sales of new shares.
Mar'ie told the House's Budgetary Commission that nearly US$782.9 million of the government's proceeds from stock divestment in Indosat were used to prepay loans carrying interest rates of above 10 percent. The loans were provided by the World Bank and the Asian Development Bank.
He said that prepayment of the high-interest loans was an integral part of foreign debt management. Divestment of the government's stocks in major state-owned companies through stock exchanges, he added, would continue contributing to the loan prepayment program.(hen)