Telkom to offer bonus shares to local investors

Telkom to offer bonus shares to local investors

JAKARTA (JP): The state-owned telecommunication company PT
Telekomunikasi Indonesia (Telkom), which plans to sell its shares
domestically and internationally later this month, is offering
incentives to Indonesian retail buyers.

"Telkom will provide additional shares as incentives for
investors who qualify under certain terms and conditions," said
an operator at the company's toll-free telephone number which is
providing information on its initial public offering.

However, the operator refused to give further information on
the terms and conditions.

According to one source, incentives will be given in the form
of bonus shares to individual Indonesian investors who keep their
shares for at least one year.

"The incentives may be in the form of one or two additional
bonus shares for every 10 shares owned by Indonesian citizens for
at least one year," the source said.

The initial public offering of Telkom shares is scheduled to
be held from Oct. 27 to Nov. 1. About 25 percent of its shares
will be listed on the New York and London stock exchanges and
another 10 percent on the Jakarta Stock Exchange.

The source, who asked to remain anonymous, said that the
offering of the incentives is to encourage more individual
investors to get involved in stock investment in this country.

To disseminate information on the initial public offering of
its shares, Telkom created a toll-free phone number (0-800-22-
1995) which is available everyday from 06:00 a.m. to 9:00 p.m.

The operators, however, will not give information on the total
number of the shares to be offered to the public, nor their value
or price.

Objectives

Telkom's president, Setyanto Prawira Santosa, said in a
statement yesterday that he wants to give opportunities to
Indonesian citizens by offering them incentives.

"Our objectives in offering the incentives are to educate
people to invest over a long-term period, which in turn will help
develop the Indonesian capital market and to involve as many
Indonesian citizens as possible in the ownership of the state-
owned telecommunication company," he said.

The source said that Telkom will be the first public company
to use the newly inaugurated Jakarta Automated Trading System
(JATS) at the Jakarta Stock Exchange in its share offering to
investors throughout the country.

He said the number of domestic investors in the capital market
is currently only about 200,000, or 0.1 percent of the Indonesian
population of about 195 million.

The statement said that information about the shares offering
will also be available through selling agents, distribution banks
and post offices.

Setyanto said the funds to be obtained from the share issuance
will be used to update the technologies of Telkom's facilities,
to diversify products as well as to expand its telephone
networks," he said.

The company, according to the statement, has restructured and
rationalized management, consolidated operations and systems and
enhanced human resources' skills.

Another source, who is managing the domestic public offering,
said yesterday that Telkom is slated to conduct road shows in
Jakarta on Oct. 9, in Surabaya, East Java, on Oct. 10, in Medan,
North Sumatra, on Oct. 11, in Semarang, Central Java, on Oct. 12
and in Bandung, West Java, on Oct. 13.

The source said that the initial public offering of the shares
will be conducted by two settlement banks -- Bank Dagang Nasional
Indonesia (BDNI) and Citibank.

BDNI will appoint its counters in Jakarta, Bandung, Semarang,
Surabaya, Medan, Ujungpandang (South Sulawesi), Bandar Lampung
(Lampung), Denpasar (Bali) and Balikpapan (East Kalimantan),
while Citibank will appoint its counters in Jakarta, Bandung and
Surabaya.

Nine other banks will also participate as distribution banks
in some cities to provide information and assist investors on the
purchase of shares. The distribution banks are Bank Bali, Bank
Bumi Daya, Bank Dagang Negara, Bank Internasional Indonesia, Bank
Rakyat Indonesia, Bank Umum Nasional, Bank Niaga, Unibank and
Lippo Bank.

Apart from the distribution banks, the team of the initial
public offering will also set up counters to provide application
forms for the shares in nine cities. The counters are the Air
Force Headquarters in Jakarta, Bank Internasional Indonesia and
Bank Rakyat Indonesia in Bandung, the Diponegoro soccer field in
Semarang, the Gedung Gita Tamtama in Surabaya, the Merdeka field
in Medan, the Karebusi Basket Hall in Ujungpandang, the Forestry
Ministry Guest House in Bandar Lampung, Radio Republik Indonesia
in Denpasar, the Balikpapan Permai Complex in Balikpapan. (kod)