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Telkom Spends Rp 2t on Share Buyback Scheme
Antara & JG | December 02, 2011

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Telelekomunikasi Indonesia the nation’s largest telecommunication operator, says it has spent Rp 2 trillion ($222 million) to buy back its shares on the open market.

The move comes as part of the company’s plan to spend Rp 5 trillion to buy 645 million shares, 3.2 percent of its total equity, from the Indonesia Stock Exchange (IDX) and New York Stock Exchange.

Rinaldi Firmansyah, president director of the company, said late on Thursday that the company had spent between Rp 1.5 trillion and Rp 2 trillion. He did not disclose the price it paid for each share.

Shareholders in Telkom agreed in May to repurchase a 3.2 percent stake held by the public at a total cost of Rp 5 trillion.

The buy back will run until the end of June 2012, the company said in May. It would buy floating shares on the exchanges in Jakarta and New York.

News on the buy back sent Telkom shares surging on the IDX. Shares in Telkom rose 0.7 percent to Rp 7,350 on the local bourse on Friday.

The shares have fallen 3.3 percent since June, a month after Telkom’s shareholders approved the buyback plan.

Telkom’s buyback would be the company’s fourth since December 2005.

Telkom has allocated Rp 15 trillion for capital expenditure next year, with 60 percent to be used for cellphone development and 30 percent for its broadband business, Rinaldi said.

Telkom also plans to build something like Silicon Valley in Indonesia, investing Rp 50 billion on the plan, he said. He did not elaborate.

Net income at Telkom fell 6.7 percent to Rp 8.3 trillion in the first nine months this year from Rp 8.9 trillion in the same period a year earlier. Its nine-month sales rose to Rp 53.1 trillion from Rp 51.3 trillion, the company said in late October.

The number of subscribers at cellphone unit Telkomsel rose to 104.1 million this year from 93.1 million in the same period a year earlier, the company said in October.