PT Telkom re-evaluates Bakrie takeover; mulls majority stake

18 Jan 2011

Indonesian telecoms giant PT Telekomunikasi Indonesia (Telkom) is reconsidering its plan to achieve a roughly USD1 billion tie-up with fixed-wireless operator PT Bakrie Telecom, with its chairman saying it now wants a majority stake in the company. Reuters quotes Telkom chairman Jusman Syafii Djamal as saying yesterday that the arrangement will be looked at again. Speaking after a meeting with the state enterprise minister he said: ‘We need to re-evaluate this … we want to be the majority owner.’

TeleGeography’s GlobalComms Database writes that negotiations between Telkom and Bakrie Telecom started in June 2010 when the former confirmed it was in talks with the smaller entity on the possible consolidation of their CDMA operations in the country. The news came in the wake of Bakrie Telecom posting a sharp rise in profits in the first quarter of fiscal 2010. Bakrie said its net profit leapt to IDR29.05 billion in the first three months of the year from IDR5.73 billion in FY2009 due to foreign exchange gains and lower operating costs. Soon after Telkom confirmed it was considering buying a stake in the company through a rights issue, with Telkom commissioner Tanri Abeng quoted as saying that this option was most likely the only way to successfully complete a merger deal. In a fresh twist however, in October 2010 Eddy Kurnia, the acting corporate secretary for Telkom Indonesia, was forced to issue a swift denial that the firm had not reached a deal with Bakrie concerning the sale of its CDMA assets to the company. The announcement followed an erroneous Reuters report, which cited ‘sources with knowledge of the situation’ as claiming that Bakrie was poised to purchase Telkom’s CDMA unit in a share deal worth up to USD1 billion.

Indonesia, Bakrie Telecom (BTel), Telkom Indonesia