Indonesia’s dominant telecommunication group PT Telekomunikasi Indonesia (Telkom) is considering a move to acquire a stake in rival telco Bakrie Telecom, Reuters reports Telkom finance director Sudiro Asno as saying.
According to TeleGeography’s GlobalComms database, Bakrie Telecom has been at the centre of speculation surrounding its ownership for more than a year. In October 2008 the Indonesian family-run business group Bakrie & Brothers announced it was looking to sell stakes in several of its major subsidiaries in order to settle debts thought to be worth USD1.2 billion. The group’s announcement confirmed speculation that it is in financial trouble after becoming ‘overleveraged’. Bakrie & Brothers did not confirm at the time how it planned to raise enough money through share sales and still retain control, but the assets on offer reportedly included Bakrie Telecom. Then at the end of October 2008, Indonesia’s stock exchange suspended trading in shares of Bakrie Telecom amid media rumours about a planned stake sale in the company. In a statement the exchange said: ‘To avoid an unnatural movement of the shares the stock exchange decided to halt the trading in the company’s shares.’ At the time, Sinar Mas Group was rumoured to be planning to buy a 20%-60% equity stake in Bakrie Telecom at IDR200 per share. The company’s stock last traded at IDR67, having lost more than 70% of its value in just a month. Bakrie & Brothers, which controls a 49% stake in Bakrie Telecom, subsequently denied that it was looking to sell its stake in the operator. In July this year however, CommsUpdate reported that Bakrie, which owns the Esia brand of wireless communication products and services, revealed plans to acquire another telecoms company in the country or merge with a rival in 2010. The move came in the face of what the company considered ‘intense competition’ in the market.