Two state firms ready for public offering

JAKARTA (JP): Two of 12 state companies are set to float their shares to the public through the capital market this year amid the current bearish market, a senior official said.

Director General of State-owned Companies Bacelius Ruru said the two state companies were ready to launch their initial public offerings (IPO).

"Actually one or two state companies are ready for IPOs this year," Ruru said at the House of Representatives yesterday after Minister of Finance Mar'ie Muhammad presented the revised draft state budget for fiscal 1998/1999.

Ruru declined to mention the firms.

Indonesia announced Thursday last week that 12 state companies would be ready for IPOs this year as part of economic reforms agreed with the International Monetary Fund (IMF) in exchange for the US$43 billion bailout package for Indonesia.

"In all of these cases, the government intends to go beyond the recent pattern of seeking minority shareholders in public enterprises by selling controlling or even complete stakes to the private sector," the government said in a statement.

However, Ruru said his office had a lot of things to do prior to listing the companies in the local market.

"There are a lot of things to do and we are working on it right now," he said.

Previous reports said state companies which had expressed interest to go ahead with their IPOs were PT Perusahaan Listrik Negara (PLN), toll-road operator PT Jasa Marga, port operator PT Pelabuhan Indonesia (Pelindo), steelmaker PT Krakatau Steel and PT Elnusa, a subsidiary of state company PT Pertamina.

PT PLN recorded a net profit of Rp 301.7 billion in 1997 from Rp 1.07 trillion in 1996 and it projected a record loss of up to Rp 1.31 trillion in 1998 due to its mounting offshore debt resulting from the rupiah's sharp depreciation against the U.S. dollar.

PT Elnusa is expected to offer about 200 million shares to the public and raise Rp 300 billion.

PT Elnusa, a joint venture between Pertamina and PT Tridaya Esta, a minority shareholder in the company currently owned by businessmen Bambang Trihatmodjo, the second son of President Soeharto, and Indra Bambang Utoyo, deals with telecommunications services.

PT Krakatau Steel is expected to offer between 30 percent and 40 percent of its total enlarged capital to the public to raise about $600 million and PT Pelindo Dua is expected to raise about Rp 2 trillion from the public.

Commenting on the plans, most analysts said only companies with dollar earnings would be able to survive the monetary crisis.

But Laksono Widodo, a senior analyst with ING Barings Securities, said state companies like PLN or Jasa Marga would be strongly supported and guaranteed by the government in their IPOs.

"State companies with good prospects and strong fundamentals can be successful with the support of the government," he said.

"But share prices during this bearish market will be discounted," he said.

"The question now is how low the stock prices will be," he said.

Laksono said even though some global funds were still away from Indonesia's market, some regional funds were ready to enter the market, despite being bearish, because stocks were already cheap.

Bakhtiar Rachman, director of Trimegah Securities, told The Jakarta Post yesterday that the monetary crisis was the most critical time for companies in Indonesia including state enterprises.

"The general view is that there will be fewer companies to offer shares to the public amid this crisis," he said.

Bakhtiar said seeking fresh funds from the public was the most viable alternative for companies during tight liquidity conditions and soaring interest rates in the banking system.

"If they go ahead with their IPO plans, there will be no companies willing to underwrite them," he said. (aly)