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The government still has to iron out some problems at several
state-owned enterprises (SOEs) it plans to privatize this year to help
finance the state budget deficit, a minister says.
State Minister for State Enterprises Sugiharto said last week that PT
Indonesia Power should first settle financial claims on its parent
company, state power firm PT PLN, before launching an initial public
offering (IPO).
"Indonesia Power and PLN must straighten out their business relations
first, particularly the cash flow between the two companies," Sugiharto
was quoted as saying Saturday by Antara.
Indonesia Power, PLN's largest subsidiary, provides power for Java and
Bali. Like independent power producers, the company also sells
electricity to PLN, which handles power distribution for the country.
Abimanyu Suyoso, Indonesia Power's president, said the company's claims
to PLN reached about Rp 15 trillion (US$1.6 billion).
Talks have been ongoing between the companies to settle PLN's
liabilities to Indonesia Power, he said.
Although the government remains confident Indonesia Power will be able
to hold an IPO this year, Sugiharto said the company could issue bonds
in the meantime should it need to raise cash in the short term for its
business plans.
"It will benefit the company in terms of public transparency and good
governance as well, as (the issued bonds) would be public debts too,"
he said.
Indonesia Power had planned to offer 10 percent of its shares to the
public in September last year.
Abimanyu also mentioned the possibility of issuing bonds as an
alternative to an IPO, but declined to provide any further details. He
is waiting to see how Indonesia Power fares -- and its financing needs
-- in a tender PLN is currently holding for the construction of power
plants able to produce a total of 10,000 megawatts.
Commenting on plans to offer more shares of publicly listed Bank Negara
Indonesia (BNI), Sugiharto said the government would maintain its
majority ownership in the bank.
While the divestment would result in a significant increase in the
investing public's ownership of BNI, the government will continue to
maintain majority ownership with at least a 51 percent stake.
Sugiharto said that while the share offer has in principle been agreed
on, it is pending final consultations with the House of Representatives.
The government currently owns 99 percent of BNI, the country's second
largest lender by assets.
The government expects to raise some Rp 2 trillion from the
privatization of SOEs this year to help finance a Rp 40.5 trillion
budget deficit, having set up a so-called "privatization committee" for
this purpose.
Last year, it raised Rp 3.2 trillion in a single -- and somewhat
last-minute -- sale of a 5.3 percent stake in state gas utility PT PGN.
Other state firms expected to be on this year's list of 14 SOEs to be
privatized include low-cost housing lender Bank Tabungan Negara (BTN)
and financing firm PT Permodalan Madani Nasional (PNM), Sugiharto said.
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