The Indonesian government believes a merger between the CDMA operations of Telekomunikasi Indonesia and Bakrie Telecom could be completed by the end of the year, according to local reports.
Minister for State Enterprises Mustafa Abubakar was quoted by…
The Indonesian government believes a merger between the CDMA operations of Telekomunikasi Indonesia and Bakrie Telecom could be completed by the end of the year, according to local reports.
Minister for State Enterprises Mustafa Abubakar was quoted by the Jakarta Post as saying that the legal documents for the merger had been presented to the Ministry, which in turn approved the deal.
Abubakar also explained that the CDMA operations of the companies would be merged under one entity and owned by Telkom, Bakrie and the public. He said that Telkom could buy new shares in Bakrie, which would be offered through a rights issue, as part of the merger agreement.
But the country’s business competition supervisory commission expressed concerns yesterday, saying the deal could lead to a monopoly of the Indonesian CDMA market, local reports wrote. The regulator has asked the two companies to be pre-notified before the start of the merger, which could see Bakrie and Telkom own between 70% and 100% of the CDMA market, according to estimates.
A few weeks ago, Bakrie secured a yuan-denominated financing facility worth about US$300m from the Industrial and Commercial Bank of China (ICBC), the company’s chief executive told reporters. At the time, he said that the loan would allow Bakrie to finance its capital expenditure for network expansion.
Bakrie is 34.38% owned by Bakrie & Brothers, a holding company, and the remaining stake is held by public shareholders. Telkom is 52.47% owned by the Indonesian government and the remaining shares are listed.
Bakrie, Telkom and the Indonesian Government were not available for comment by the time of going to press.
