Telkom, units in talks to settle debt

Telkom, units in talks to settle debt

Tantri Yuliandini, The Jakarta Post, Jakarta

State-owned telecommunications company PT Telkom said it was
currently negotiating with some of its subsidiaries on the
finalization of their debts to Telkom which has Rp 118.69 billion
(about US$11.3 million) in potential losses according to an audit
by RSM International.

Telkom's director of finance Mursyid Amal said on Monday that
Telkom was prepared for its 35 percent shares in regional
cellular company PT Komselindo, its largest debtor, to be
diluted.

"If there's a new investor wanting to come in, then please do
so, because Telkom will not inject more money," he said on the
sidelines of a media conference here.

Komselindo is currently trying to attract new investment both
in a bid to repay debt and finance an expansion program from
analog advanced mobile phone system (AMPS) to the more advanced
code division multiple access (CDMA).

Mursyid said that Komselindo owes between 10 percent and 15
percent of the total debts owing to Telkom.

Another of its debtors, regional cellular company PT Metrosel,
has agreed to a debt to equity swap with Telkom, Mursyid said.
Telkom owns a 20.17 percent share in Metrosel.

Mursyid did not specify the amount of debt or what percentage
Telkom would gain from the swap.

Telkom will also relinquish its 25 percent share in PT
Mobisel, another regional cellular operator, he said.

The company is also negotiating with vsat operator PT Cipta
Sari Mandiri (CSM) and several television stations, Mursyid said,
adding that CSM had indicated that it would repay its debts in
installments.