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Indonesia Looks to Sell Stakes in Four State-Owned Firms Via IPO
Agustiyanti | January 31, 2012

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The Indonesian government plans to sell stakes in four state-owned companies and one publicly traded bank this year as part of efforts to improve transparency and boost their financial performance, a top government official said on Tuesday.

The coordinating minister for economic affairs, Hatta Rajasa, said the government planned to sell as much as a 35 percent stake in Semen Baturaja, a cement maker, through an initial public offering.

Three other companies being put up for sale are Industri Telekomunikasi Indonesia (Inti), garment producer Industri Sandang Nusantara and glass manufacturer Industri Gelas. Inti, a telecommunication-equipment producer, makes fiber-optic cables and mobile-phone handsets.

Hatta, who spoke after a meeting with the privatization coordination committee in Jakarta, did not provide terms of the IPOs including the timeframe.

Proceeds from Semen Baturaja’s IPO would be used to build a plant in Lampung that could bring the company’s total production to 3.5 million tons of cement a year from 2 million tons currently, according to the minister.

“All the money raised by the privatized companies would go to support the companies’ financial structure, not for the state treasury. It’s all for the sake of the companies’ health,” said Hatta, who is also the chairman of the National Mandate Party (PAN).

The IPO by Semen Baturaja has been delayed since last year due to problems with purchasing land from other state-owned companies, but those issues have now been resolved.

“Now the process has been completed, and the IPO can be done faster,” Hatta said.

The government also plans to sell a stake in publicly traded Bank Tabungan Negara through a secondary share sale from its enlarged capital.

The state mortgage provider will sell a 12 percent to 14 percent stake via secondary share sale. It went public in 2009.

State Enterprises Minister Dahlan Iskan said the plan had yet to be approved by the House of Representatives. He mentioned last month that some state-owned companies would go public but didn’t identify any of them.

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