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)