Dian Kuswandini, The Jakarta Post, Jakarta | Mon, 06/09/2008 10:29 AM | Headlines
Singapore Technologies Telemedia (STT) Pte Ltd, a subsidiary of Temasek, and Qatar Telecom (Qtel), announced Saturday their joint subsidiary, Asia Mobile Holdings (AMH), would sell its 40.8 percent stake in PT Indosat to Qtel.
However, the Business Competition Supervisory Commission (KPPU) said that the deal could violate a Jakarta district court ruling which required a buyer to acquire no more than 10 percent.
Under the deal, STT will no longer have any involvement in Indosat, Indonesia's second-largest telecommunications company, according to a joint press statement released Saturday.
AMH is currently 75 percent owned by STT and 25 percent by Qtel.
According to the statement, "Qtel has agreed to pay S$2.4 billion (US$1.8 billion) in cash to acquire AMH's entire interest in Indosat."
The move followed a recent Central Jakarta District Court ruling that found Temasek and its subsidiaries, including STT, guilty of anti-competitive behavior in Indonesia's telecommunications industry.
The ruling upheld a decision last November by KPPU stating that Temasek and its units had violated anti-monopoly laws, particularly on cross-ownership.
In addition to owning STT, Temasek also owns a 54.14 percent stake in SingTel, which holds a 35 percent stake in PT Telkomsel, the country's largest cellular phone operator.
The Central Jakarta court fined Temasek and its units, Telkomsel and Indosat, Rp 15 billion ($1.6 million) and gave Temasek a choice of relinquishing at least 50 percent of its shares in both Telkomsel and Indosat or letting go of all shares in either company within two years after the verdict was issued.
The court added that Temasek could sell up to 10 percent of its shares to an individual buyer, higher than the maximum 5 percent mandated by the KPPU.
Temasek and subsidiaries are currently waiting for a final decision from the Supreme Court on their appeal of the district court ruling.
KPPU member M. Iqbal said the sale, as outlined in the press statement, would violate the court ruling.
"The court ordered that each buyer was allowed to acquire up to a 10 percent stake. Therefore, selling a 40.8 percent stake in Indosat should involve four buyers, not just Qtel," Iqbal told The Jakarta Post on Sunday.
However, he said, "the KPPU will not react to the divestment plan, and will let the Supreme Court decide whether it is legal or not."
Myrna Thomas, managing director for corporate affairs at Temasek, said, "Any decision in respect of the (STT) stake in Indosat is determined solely by the independent boards and managements of STT and its associates."
STT senior vice president of strategic relations and corporate communications, Kuan Kwee Jee, said "the sale does not require consent from Temasek because STT and Temasek are separate companies".
Qtel's group chairman, Sheikh Abdullah Al Thani, said the company was "delighted to increase our strategic stake in Indosat. The transaction demonstrates Qtel's commitment to Indonesia and its rapidly developing infrastructure".
Following the transaction, Qtel will serve nearly 44 million customers in 16 countries.
The statement added the deal would not affect STT and Qtel's holdings in AMH or investments in other markets made by STT and Qtel through AMH.
A stock market analyst said the stake sale should provide a boost for Indosat's stock price.
"There is a big possibility that the acquisition will increase Indosat's stock price," Hendry Andrean from Sinancorpindo Nusa Securities said.
"With the new ownership, Indosat could also improve its overall performance," he said.
Singapore Technologies Telemedia (STT) Pte Ltd, a subsidiary of Temasek, and Qatar Telecom (Qtel), announced Saturday their joint subsidiary, Asia Mobile Holdings (AMH), would sell its 40.8 percent stake in PT Indosat to Qtel.
However, the Business Competition Supervisory Commission (KPPU) said that the deal could violate a Jakarta district court ruling which required a buyer to acquire no more than 10 percent.
Under the deal, STT will no longer have any involvement in Indosat, Indonesia's second-largest telecommunications company, according to a joint press statement released Saturday.
AMH is currently 75 percent owned by STT and 25 percent by Qtel.
According to the statement, "Qtel has agreed to pay S$2.4 billion (US$1.8 billion) in cash to acquire AMH's entire interest in Indosat."
The move followed a recent Central Jakarta District Court ruling that found Temasek and its subsidiaries, including STT, guilty of anti-competitive behavior in Indonesia's telecommunications industry.
The ruling upheld a decision last November by KPPU stating that Temasek and its units had violated anti-monopoly laws, particularly on cross-ownership.
In addition to owning STT, Temasek also owns a 54.14 percent stake in SingTel, which holds a 35 percent stake in PT Telkomsel, the country's largest cellular phone operator.
The Central Jakarta court fined Temasek and its units, Telkomsel and Indosat, Rp 15 billion ($1.6 million) and gave Temasek a choice of relinquishing at least 50 percent of its shares in both Telkomsel and Indosat or letting go of all shares in either company within two years after the verdict was issued.
The court added that Temasek could sell up to 10 percent of its shares to an individual buyer, higher than the maximum 5 percent mandated by the KPPU.
Temasek and subsidiaries are currently waiting for a final decision from the Supreme Court on their appeal of the district court ruling.
KPPU member M. Iqbal said the sale, as outlined in the press statement, would violate the court ruling.
"The court ordered that each buyer was allowed to acquire up to a 10 percent stake. Therefore, selling a 40.8 percent stake in Indosat should involve four buyers, not just Qtel," Iqbal told The Jakarta Post on Sunday.
However, he said, "the KPPU will not react to the divestment plan, and will let the Supreme Court decide whether it is legal or not."
Myrna Thomas, managing director for corporate affairs at Temasek, said, "Any decision in respect of the (STT) stake in Indosat is determined solely by the independent boards and managements of STT and its associates."
STT senior vice president of strategic relations and corporate communications, Kuan Kwee Jee, said "the sale does not require consent from Temasek because STT and Temasek are separate companies".
Qtel's group chairman, Sheikh Abdullah Al Thani, said the company was "delighted to increase our strategic stake in Indosat. The transaction demonstrates Qtel's commitment to Indonesia and its rapidly developing infrastructure".
Following the transaction, Qtel will serve nearly 44 million customers in 16 countries.
The statement added the deal would not affect STT and Qtel's holdings in AMH or investments in other markets made by STT and Qtel through AMH.
A stock market analyst said the stake sale should provide a boost for Indosat's stock price.
"There is a big possibility that the acquisition will increase Indosat's stock price," Hendry Andrean from Sinancorpindo Nusa Securities said.
"With the new ownership, Indosat could also improve its overall performance," he said.