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.